Discharging Las Vegas Markers

BankruptcyLawyerHonolulu: Can you get rid of Las Vegas markers in Bankruptcy?

If I were a betting man....probably not

by Honolulu Attorney, Brian Kawamoto
Unpaid "trust fund" employment taxes are not discharged in bankruptcy so I always felt that this was not the kind of debt you want to have, however if you have an unpaid Las Vegas marker, you may be worse off. A lot of Hawaii residents go to Las Vegas to gamble each year, and I am sure that some of them will take out "markers" with casinos from time to time. Depending on the amount borrowed it can be a felony if you have unpaid gambling markers, and many casinos will pursue prosecution against those who refuse to pay the debt. The law in Nevada considers the failure to pay back a marker like writing a bad check and if you should file for bankruptcy (and I suppose it may also depend on the size of your debt), the casino will generally object to your debt being discharged in your bankruptcy case. See 11 USC 532(a)(2)(a) which allows creditors to contest the discharge of their debt based upon "obtaining money under false pretenses". The courts have generally agreed with the casinos on this matter and found these debts to be non-discharged. If it should so happen that the debt is either too small and the casino decides not to contest your bankruptcy case, then you may be able to get rid of that debt, however your troubles may not end there, as the casino and the prosecutor's office in Nevada may still decide to go forward against you with a criminal prosecution, so if that should happen to you, then you may still end up having to pay back the debt to the casino if you wish to avoid prison time. So, no matter which way you cut it, it appears that you will end up having to pay your debt back the casino.
Even if you don't live in Nevada, if your case goes forward you can and will be arrested here in Hawaii where you will be held for extradiction to Nevada.
In Hawaii, if you file for a Chapter 13 naturally you would like to treat your gambling debt as a priority debt so that you could pay it off 100% to avoid criminal prosecution, the trustee however sees it quite differently and frankly is not concerned about your criminal issue, and because he treats it as just another one of your creditors, he considers it as a non priority debt and the creditor would receive the same percentage as your other unsecured or non priority creditors (often less than 100%) and if the casino does not get 100% payment under your plan, needless to say the criminal case usually goes forward.
So, if you have an outstanding and unpaid gambling marker with Las Vegas or Nevada you should consider retaining a Nevada criminal defense attorney before you file for bankruptcy, seehttp://www.casinoexecutivenetwork.com/news/gamblers-strike-out-in-suits-tied-to-las-vegas-casino-markers. If you pay off your marker and then file for bankruptcy within 90 days that is a preferential transfer and the bankruptcy trustee could recover the money by going after the casino. If that happens you will end up owing money to the casino. I suppose the lesson to be learned here is to avoid taking out markers in Las Vegas if you don't have the ability to repay it. If you would like to learn more about other debts that are not discharged in bankruptcy see, http://bankruptcyhawaii.blogspot.com/ . If you use your credit cards to gamble and later file for bankruptcy, the possibility does exist that a creditor may file an adversary proceeding and object to the discharge of their debt on the grounds that the debt was procured by false pretenses. To prevail the creditor must show you had no intent to pay back the debt. Courts will look at how much you charged, when it was charged, whether you made any payments on the debt before you filed, whether you took a gambling anonymous class, etc. Discharging these debts can be a difficult issue as it will depend on the facts and circumstances of your case, some debtors have discharged gambling related credit card debts, others were not able to. Lastly, adversarial proceedings are quite expensive as it concerns your attorney's fees, as it is usually not covered in a typical uncontested bankruptcy fee agreement. The lesson to be learned from all of this I suppose is that if you gamble, don't lose!, or if you can't afford to lose, then don't gamble. Think about it, Las Vegas wasn't built on winners.

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