Getting Out of Gambling Debt: Get Relief With These Tactics

Gambling can be a way to have fun — but for some folks, it can become a problem. About 2.5 million people in the United States meet the criteria for a severe gambling problem, while another five to eight million have a mild or moderate gambling problem, 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.

How to get out of gambling debt

If your gambling debt seems insurmountable, take a deep breath and try to formulate a plan. Use these strategies to stop recurring debt, get a better idea of what you owe, and create a plan for how to pay it back.

Stop adding to your debt

Before you can think about options like gambling debt forgiveness, you need to quit running up gambling debts as soon as possible. I know, easier said than done. Some people think they can chase their losses and win all their money back, but in many cases, this just digs the hole deeper.

Instead, consider seeking help from 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.

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. I recommend creating a list of all your loans with the following information:

• Total amounts due
• Currently monthly payments
• Interest rates
• Late fees or other penalties

In many cases, you might 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.

Consider your options to get money to pay off your debt

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 unwanted items 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 on the weekends 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 from your 401k 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.

What to do if you can’t repay your gambling debt

Gambling debt 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.

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:

Get a lower interest rate with 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.

However, debt consolidation can be a slippery slope, as it won’t solve your gambling debt. Do the calculations before you commit to a new loan to make sure you can manage your new monthly payments, and make sure you account for upfront fees and costs that could make the loan too pricy to take out.

Create a debt management plan

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 brings you gambling debt relief.

While the NFCC is an extremely helpful resource, its agents are miracle workers. They can’t provide you with instant debt relief, so think of this more as a long-term solution rather than a quick fix.

Try for gambling debt forgiveness with 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. This effectively acts as debt forgiveness and can greatly reduce your financial burden.

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.

However, not all creditors offer this flexibility — especially if you’ve been late on payments in the past.

Ask friends and family for financial support

Financial support from loved ones can go a long way in paying down your gambling debts. If you have a close friend or family member who is willing to help you pay down your gambling debt, it can save you from taking more drastic measures.

But I’d recommend only considering this as a last resort before bankruptcy. Often, taking out loans from loved ones leads to an increased strain on your relationship. And if you have a gambling relapse and slip back into debt, it could permanently end your relationship altogether.

Declare bankruptcy

For most people, bankruptcy is the option of last resort after you’ve exhausted all other means of financial support. 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.

When to get help for gambling

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.

Resources for gambling relief

If you need immediate help for your gambling debts, there are several resources available:

• National Council on Problem Gambling: Lists state-by-state gambling resources so you can find help near you. You can also call the National Problem Gambling Helpline at 1-800-GAMBLER or text 800GAM for 24/7 free help.
• Gamblers Anonymous: A help group for people who gamble that meets regularly in cities across the country.
• Gam-Anon: A help group for the loved ones of people who gamble that meets regularly in cities across the country.
• Gamtalk: An online support community to help people with gambling issues share their experiences.
• SMART Recovery: A four-point peer-to-peer program that can help you overcome problems with gambling addiction.

FAQs

Bottom line

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.

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