Like with other types of debt, there are consequences if you can't pay off your gambling debt. 

For starters, your creditors will keep chasing you for the money owed, which can be very stressful and can contribute to mental health issues. It's also quite common for loan sharks to prey on those who have a preoccupation with gambling, even though loan sharking is illegal. In fact, evidence shows that they sometimes prey on gamblers at casinos, so you should never accept a loan from someone you think might be a loan shark - if you think you have taken out an illegal loan, then make sure you report them.

Some of the more severe consequences of gambling debt are bankruptcy and losing your assets (such as your house or car). Interest may also be added over time, making your overall debt even larger. The effects of not being able to pay off your debt will differ depending on the amount of debt you have and who your creditors are, but, no matter your situation, we invite you to an in-depth consultation to discuss your options for writing off your debt!

Debt Management Plans (DMPs)

Debt Management Plans are an informal agreement between you and your creditors and can only be used on unsecured debts. If you have any secured debts, you'll need to make sure you have the appropriate finances to pay those debts off too.

How does a DMP work?

With a DMP, you set up a monthly payment to the provider of the plan, who then distributes the money towards your individual creditors, meaning you don't have to pay them all individually as your provider will deal with your creditors.

Your provider will charge a fee for doing this - however, there are some charities available that will provide a DMP without a charge, so if you're unsure about whether you can pay the fee, it's worth researching non-profit organisations first. The duration of the DMP depends on the amount of debt you have.

A DMP is not legally binding, so the agreement can be cancelled should you start to miss any payments. It should be noted that NDH Financial are unable to provide DMPs - however, we can apply for IVAs on your behalf.

Individual Voluntary Arrangements (IVAs)

Individual Voluntary Arrangements are formal agreements that are legally binding between you and your creditors, so you need to make sure that you can keep up with your monthly payments as part of a payment plan before signing up for an IVA. 

To qualify, 75% of your creditors have to agree to an IVA and you must reside in England, Wales or Northern Ireland. For Scottish residents, you will have to seek out an alternative debt solution.

How does an IVA work?

IVAs are quite similar to DMPs, as you can only include unsecured debts in your agreement. The exception to this is if the item that the secured debt refers to has been repossessed - in these situations, you can include the shortfall in your remaining balance. Other debts that an IVA doesn't cover include student loans and court fines, although this is not a definitive list. 

An IVA usually lasts for 5-6 years, and the money would be paid directly to the insolvency practitioner you use to set up your IVA, who are also authorised to take a fee, before sending the remaining amount to your creditors. At the end of your IVA, any remaining qualifying debt will be paid off, so long as the terms have been complied with.

As a licensed insolvency practitioner, NDH Financial can set up an IVA for you - we specialise in IVAs, so you know you'll be getting the best service available if you choose to apply for one with us! For more information, check out our IVA learning hub.

In both options, the Official Receiver will review your conduct before applying for bankruptcy or the Debt Relief Order. When reviewing your conduct, there are certain things the Official Receiver is looking for. One of the things is whether you have carried out any gambling, rash or hazardous speculation, that has resulted in you increasing your debt position.

When the Official Receiver determines that your debt position has been made worse by your gambling, then they may apply for a bankruptcy restriction order, or a debt relief restriction order. Both of these will mean the restrictions of bankruptcy or a debt relief order will be applied for a period of 2 to 15 years, from the date the order comes into force, and will not end once you are discharged from bankruptcy, or the 12 months under the debt relief order has expired.

One of the main things people worry about when facing debt is the prospect of bailiffs. If you're an avid television watcher, you've probably seen images of bailiffs forcing their way into people's houses and aggressively taking their possessions away. 

The good news is that bailiffs cannot make their way into your home by force for gambling debts, and you do not have to let them in if you don't want to. They must enter your home in a peaceful manner if you allow them in, but it's important to note that they can still enter if either your front or back door is left open.

What can bailiffs do?

Bailiffs can only be used if they have been appointed by your creditors by a court order and only if they are collecting a debt you are legally required to pay. They can only collect items that are yours or items that are co-owned by yourself and somebody else, such as your partner or spouse. They can only claim items that they can physically touch - this means that they can't collect assets held in a bank account or items they can see through a window that they can't physically access.

Bailiffs will usually take things that can be sold for a high value, such as cars, jewellery and electrical goods, although this list is not exhaustive. Things bailiffs can't take include pets, tools, vehicles displaying a blue badge/mobility vehicles (such as a wheelchair) and equipment needed for your job - although again, this is not a complete list. 

What is a controlled goods agreement?

A controlled goods agreement is an agreement between yourself and the bailiff - it allows you to keep your goods and assets so long as you agree to continue paying your debt. It’s important to note that you don't have to sign it if you don't want to. The agreement will not be valid until you’ve signed it.