Gambling debt in an IVA

Gambling debt in an IVA

With the increased access to on line gaming sites it is easier than ever before to build up gambling debts. If you are facing unaffordable debt, will creditors accept gambling debt in an IVA?

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Can gambling debt be included in an IVA?

If you are struggling with personal debts one of the solutions you should consider is an Individual Voluntary Arrangement (IVA). However if you have gambling debts you may be worried that you will not be allowed to include these. The concern you may have is that such debts are illegal or not legitimate.

There is no need to be worried. You can include all legal unsecured debts in an IVA no matter how they have been generated. Gambling is not a crime and as such any unsecured debts generated through this activity can be included.

Although many people gamble for recreation you may have tried to pay off other debts by winning money. Generally speaking this never works. It is extremely rare to find an example of where someone has successfully gambled their way out of debt.

Most commercial banks will agree to your IVA as long as your proposal is reasonable. This is the case whether the debts are a result of gambling or otherwise.

Do you have to prove you are no longer gambling?

Gambling can become addictive. As such if you have generated gambling debts in the past there could be the possibility that you will be tempted to do so again. If that were to happen during an IVA you might no longer be able to afford to make your monthly payments and it could fail.

For this reason you will need to be able to demonstrate you are no longer gambling. You will normally need to supply your last 3 months bank statements with no evidence of gambling on them.

In addition it is useful if you have referred yourself to one of the gambling advice charities such as Gamblers Anonymous or Gamcare. Signing up to a system which blocks you from using online gambling sites such as gamstop also helps to show your intent.

Before starting an IVA you must show that you are no longer gambling. So no gambling activity on your bank statements for the last 3 months.

What if you have gambled recently?

If you have gambled in the last 3 months you can still take action to resolve your debts. It is unlikely you will be able to apply for an IVA straight away. However if you need immediate relief you could use a Debt Management Plan as a temporary measure.

The DMP will mean reduced payments and no further action from your creditors. They may also freeze further interest and charges. More importantly you will start to get used to sticking to a living expenses budget. Spending only what you can afford and not taking out any more credit.

Once you have 3 months of bank statements showing no gambling you can then start an IVA application. It does not matter that you are on a DMP. You can stop it as soon as your IVA is up and running.

A DMP can be a useful temporary solution for people with recent gambling debts who are waiting to apply for an IVA. You can set the plan up yourself or get help from a debt management organisation.

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