Bankruptcy: What About Business Debts, Gambling Debts & Student Loans?

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Question: I made some bad business deals and I have some gambling debt. I also have student loans. I need to know how much of this debt can be eliminated in bankruptcy. I live in Cumming and I work in Sandy Springs. I'm getting married and my fiancé wants me to be debt free when we get married in a year. She suggested I file for bankruptcy.

The business debt is for a business I owned in Roswell. We were open for about a year and I bought some inventory, equipment and I owe money for the business lease. We borrowed a lot of money and I put a lot on my credit cards. But it didn't work out and my partner got arrested in Atlanta. Now he's in jail for stealing. The gambling debt is from a long weekend in Las Vegas with some college buddies where I got a little drunk and the casino gave me credit so I could keep gambling. I lost in Blackjack, roulette, and slot machines. The student loans are from college and graduate school (I dropped out).

Answer: Business debt and gambling debt can be discharged in bankruptcy. In fact, it is very common for business debt that was guaranteed personally to be included in a personal bankruptcy filing. And business debt itself can also be discharged if that business files bankruptcy.

Gambling debt is also dischargeable in bankruptcy. We have seen debts incurred in Las Vegas, Atlantic City and at Indian casinos be eliminated. Historically, gambling debt was not dischargeable. However, the law was changed and gambling debts can now be included in bankruptcy.

Student loans, however, are another story. Generally, student loans are not dischargeable in bankruptcy. It is very rare to be able to have student loans eliminated. Obviously this is troubling for millions of Americans who now owe over one trillion (yes, trillion) dollars in student loan debt.

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