Gambling can be a way to relieve stress and enjoy an evening’s entertainment. However, for some folks, it can become a problem. About two million people in the United States meet the criteria for pathological gaming, while another four to six million are considered problem gamblers, according to the National Council on Problem Gambling.
Even if you’re not addicted to gambling, the reality is that gaming debts can add up quickly — and threaten your financial health. If you’re drowning in debt, here are some of the things you can do to move forward and get gambling debt relief.
5 tips to get gambling debt relief
For the most part, figuring out how to pay off debt from gambling is similar to approaching other debt problems.
1. Acknowledge that you have a problem
The first step to moving forward is acknowledging that you might have a problem. According to the American Psychiatric Association (APA), “[L]ike alcohol, tobacco or drugs of abuse, gambling can become an addiction. … Any gambling behavior that creates harm, distress and negative life problems could be a sign of a gambling disorder.”
If you feel like you have to lie to family members, friends, or co-workers about how much you gamble or if you feel the need to keep betting more money to eventually come out ahead, these could be signs of a problem, says the APA.
2. Stop adding to your debt
It’s important to quit running up gaming debts as soon as possible — and getting help can help you stop adding to your debt. Talk to friends and loved ones for support through the process, or use an organization to help you work through problematic behaviors. Both can help hold you accountable and encourage you to stop adding to the debt.
Consider replacing gambling with another activity. There are other ways to find entertainment with your loved ones, including outdoor activities, movies, and developing a new hobby. Focus on filling your life with other activities — especially things you can do with family members — that can help support you as you get professional help.
3. Figure out what you owe
Next, add up what you owe. Just as you would with any other debt payoff plan, it’s important to know where you stand. List all your loans, along with their total amounts, monthly payments, and interest rates. In many cases, you might discover that you have a combination of personal loans, credit card debts, or other types of borrowing from loan sharks or bookies due to gambling.
It can be daunting to look at the list of debts, but the reality is that you need to know what you’re facing before you move forward.
4. Consider your options for getting the money
Now that you know where you stand, it’s time to make a plan to get out of debt. Raising money for gambling debt relief could help you move forward. Consider some of the following ways to earn extra money to pay down your debt:
- Cut your monthly expenses: Review your income and expenses. Are there areas where you can reduce what you pay on services or products? If you cut out the unnecessary spending, you can redirect some of that money toward paying down gambling debt. (Check out our picks for top budgeting apps if you want some help with this.)
- Sell unused items: Consider selling some of the things you no longer use. You can sell using local classifieds, Craigslist, or eBay. This money can be applied to your debts.
- Get a second job: Perhaps you need more money than what you can get by reducing your spending and selling your stuff. A second job can help you earn more cash to pay off your debts; once you’ve gotten rid of the debt, you can quit the job.
- Use the sharing economy: If getting a second job isn’t the right move for you, the sharing economy might help. You can rent out a room in your home using Airbnb or consider driving for Uber or Lyft on your own schedule. With the sharing economy, you have a little more flexibility in how you earn more money.
- 401(k) loan: This might not be the best option, since it takes some of your money out of the market. However, if you have the ability, you might be able to take out money to pay off your gambling debts. The interest you pay goes back into your 401(k). However, realize you could be penalized and taxed if you don’t repay the loan as required.
- Home equity loan: Your home is likely your most valuable asset. You can usually get a reasonable interest rate with a home equity loan. However, you take on a big risk — you could lose your home if you don’t make your payments.
Carefully think about what moves will be helpful in reducing your debt and helping you get back on your feet. With a combination of strategies, you might be able to recover from your gambling debt faster.
5. If you can’t repay, look to relief programs
For some, the debt might be too much to handle without a more substantial gambling debt relief plan. Here are some of the debt relief solutions that might help you overcome your gambling debt and move forward with your finances and your life:
- Debt consolidation: If you have good credit, you might be able to get an unsecured debt consolidation loan that can help you pay off your gambling debt. Such a loan would help you get everything in one place, with one payment and a (hopefully) lower interest rate.
- Debt management: You can get debt management help by going through the National Foundation for Credit Counseling (NFCC) and finding someone near you. A reputable NFCC agency can help you create a debt management plan and even help you come up with a payment strategy that fits your budget.
- Debt settlement: With debt settlement, your creditor allows you to pay less than the total amount you owe on the debt. In some cases, this requires you to make a lump-sum payment. There are companies that can help you manage the debt settlement process, but you have to watch out for scams. Also, debt settlement often negatively impacts your credit score. Carefully consider debt settlement companies before you move forward.
- Negotiate a payment plan: You can also go to your creditors and ask them to help you come up with a payment plan. You might be able to better manage your monthly cash flow with a payment plan, and in some cases, you might get a lower interest rate and be able to pay off your debt faster with a payment plan.
- Bankruptcy: For most people, bankruptcy is the option of last resort. However, if your gambling debt is so overwhelming that nothing else appears to be a workable solution, it might make sense to consider filing for chapter 7 or chapter 13 bankruptcy. Be aware, though, that your creditors may fight the proceeding in the case of gambling. Some lawyers recommend you wait until your last gambling debt is at least 90 days old before you file.
Additionally, you might not have your debt discharged if the creditor can prove you had no intention of repaying the debt when you assumed it. And, of course, the impact on your credit is long-lasting in the case of bankruptcy.
Gambling debt relief is dealt with much like any other unsecured debt you might have, so it’s important to pay attention to your options and figure out which scenario is likely to work best in your situation.
How do people get into gambling debt?
Gambling debt may result from a bad night playing casino games, but it can also be a more serious issue involving problem gambling behaviors, such as a gambling addiction. If you use gambling as a strategy to relieve stress, be sure to set limits for yourself with how much money you’re going to spend so it doesn’t have the chance to become a financial or mental health issue.
What happens if you can't pay gambling debt?
Gambling debt is similar to other types of debt. If you can’t pay it, the debt could go to a collections agency and may show up on your credit report as a collections account. This could damage your credit score and may affect future opportunities with lenders. In some cases, you may face criminal charges if you don’t pay your gambling debt.
What are the signs of gambling addiction?
If your actions involving gambling affect your typical behavior and lifestyle, including disrupting your work or family life, draining your bank account, or taking cash advances on your credit cards, then it’s likely that you have a gambling problem. Signs of gambling addiction may include an increasing desire to gamble, needing to bet more money more frequently, and a continued loss of control over your gambling activities despite clearly negative consequences in your life.
How can you get out of gambling debt?
If you want to get out of gambling debt, you need to approach it like getting out of other types of debt. Come up with a clear repayment plan with specific steps. This could include creating a budget, cutting out unnecessary expenses, or earning extra income with one of the best side hustles.
In addition, you should admit you have a gambling issue so you can find emotional balance while working on your finances. This may be the first step to stop gambling.
In the end, your gambling debt isn’t likely to be treated much differently from any other debt you have. Understanding that you might be a compulsive gambler and then getting help to quit the behavior are the first steps to moving forward. Once you’ve done that, you can look at your options for getting gambling debt relief.