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Addiction, Gambling and Personal Bankruptcy
Addiction, Gambling and Personal Bankruptcy
Where addiction is concerned, it is often difficult to break free from a vicious and destructive cycle. Take gambling, for example; those who have gambled themselves into insolvency or personal bankruptcy may breach the terms of their bankruptcy by continuing to gamble, subsequently finding themselves in more debt that they are legally obliged to pay. Gambling can be an addiction like any other, and therefore can have a significant, negative impact on both the person who is suffering from the addiction, and those with whom they come into contact.
The Canadian Society of Addiction Medicine's definition of addiction is: "A primary, chronic disease, characterized by impaired control over the use of a psychoactive substance and/or behaviour." The definition continues to say that like other diseases, addiction “can be progressive, relapsing and fatal”. It also highlights key features of addiction, such as “change in mood, relief from negative emotions, provision of pleasure, pre-occupation with the use of substance(s) or ritualistic behaviour(s); and continued use of the substance(s) and/or engagement in behaviour(s) despite adverse physical, psychological and/or social consequences.” These key features of addiction are closely related to the characteristics of the individual, which is perhaps an explanation as to why addiction often goes hand-in-hand with other mental illnesses such as personality disorders. The link is so strong that rehabilitation and treatment centres now offer personality disorder and alcoholism treatment, for example, as a combined treatment process. The common combination of addiction and personality disorder means that even more disruption can occur to the lives of those living with addiction, and it can be very difficult for both the affected person and his or her family to cope.
Gambling and bankruptcy
In the case of a gambling addiction, coping with the illness often means having to cope with the financial strain that comes with it. As with many addictions, gambling costs money, and people can often find themselves financially crippled by it. Should someone gamble themselves into bankruptcy, they would need to find themselves a trustee, such as C. E. Craig and Associates. It is a stressful time for anyone, but the trustees are there to help and to ensure that the bankrupt can get back on track. However, it is important to understand how it works, and when a bankrupt can be discharged from bankruptcy. If the primary cause of the bankruptcy is gambling, it can affect the nature and the type of discharge that debtor can receive at the end of the bankruptcy term.
When a person files for personal bankruptcy, they agree to have a trustee take control of any assets that are above a certain value or agree to repurchase them if the debtor wishes to retain them. The trustee will offer the assets for sale or allow the debtor to make payments over time for their value if they chose to retain them, with the net value used to back a portion of the debts that the bankrupt owes. The trustee will also ensure that the bankrupt pays his or her monthly payments for the duration of the bankruptcy. After a certain amount of time, a bankrupt can apply to be discharged from his or her obligatory payments. However, if the bankrupt is known to gamble, then this process becomes more difficult.
In ordinary cases of bankruptcy, if it is a first time bankruptcy, the bankrupt will be automatically discharged after nine months if he or she has attended two compulsory counselling sessions, does not have surplus income throughout the duration of the bankruptcy and if the trustee, Superintendent of Bankruptcy and the creditors have no objection to him or her being discharged. However, there are some restrictions under sections 172 and 173 of the Bankruptcy and Insolvency Act that will affect a bankrupt who gambles, whether they have a gambling addiction or not. This section gives the court the ability to refuse to discharge a bankrupt on a number of conditions, and also states that:
“The court shall, on proof of any of the facts referred to in 173 […] refuse the discharge of a bankrupt […] or require the bankrupt, as a condition of his discharge, to perform such as acts, pay such moneys, consent to such judgements or comply to such other terms as the court may direct”.
Those facts referred to in 173 include: “The bankrupt has brought on, or contributed to, the bankruptcy by rash and hazardous speculations, by unjustifiable extravagance in living, by gambling or by culpable neglect of the bankrupt's business affairs”. This means that a trustee may refuse to discharge the bankrupt of his or her bankruptcy if gambling was the cause or a significant contributing factor to the initial bankruptcy.
The damaging effects of a gambling addiction
Filing for bankruptcy can often seem like the only option, but the restrictions stated above show that bankruptcy does not automatically devolve the debtor of all obligations and may just the beginning of a long and complicated process for someone who has a genuine gambling addiction, as while they are battling to control their addiction, they are also struggling to continue paying their debts. The Canadian Centre for Substance Abuse carried out a survey in 2005 to report on gambling addiction in the country and investigate how the increase in the availability of online gambling may have affected the number of gambling addicts. It raises some important questions about the culture of online gambling, and may help people to think twice and question themselves before gambling becomes a habit, and then a full-blown addiction. It is important to be aware of the warning signs of addiction, and to seek help immediately before a bad habit becomes a destructive addiction
Contributed by Eve Pearce