Q:
A friend is thinking of filing for bankruptcy, primarily due to credit card debt plus some casino markers. He was told that most debt can be erased by bankruptcy, but not debt owed to casinos. Is that correct?
A:
Not at all. In fact, just the opposite.
According to Rodney Jean, who heads the bankruptcy division at Lionel Sawyer Collins, Las Vegas’ most respected law firm, markers are like promissory notes. As such, not paying them can open you to bad-check charges –- and the Clark County District Attorney is quite vigorous about enforcing this, although high rollers with multimillion-dollar debts are the DA office's preferred targets, since they take a cut of the money recovered.
But, Jean says, there is no bankruptcy exception that prevents you from writing off casino debt. He does, however, cite a different motivation for making good on your markers: "Any reasons that you want to pay the casinos might have to do with how much you want to gamble [there] again."
Update 13 May 2009
Two comments from an informed reader:
"First, many of the casinos will negotiate with a person who has not been able to pay his markers. If they can get a portion of it back, they are often happier than prosecuting. Don't, however, expect to set up credit accounts in the same casino again, or affiliated casinos, after such an action. The person should go to his casino host. The second comment is obvious: If the person has extended credit beyond his means to repay, he should get professional help for his gambling problem. Using credit to get money to play is one of the major symptoms of a "problem gambler," or even a pathological gambler."
And one comment from a second informed reader:
"As a creditor's-right's lawyer who regularly sues debtors in bankruptcy for fraud or for submmitting false financial statements as part of a loan application under 11 U.S. C Section 523(a)(2), the discharge of a marker may also be subject to a similar claim. If your fininacial situation was so desperate and you went to Vegas knowing you were going to file bankruptcy or had previously retained bankruptcy counsel, such marker could be held to be nondischargeable. Further, if you filled out an application that was materially false and was relied upon the casino to extend you credit, that marker might also be nondischargeable. These are not necessarily easy claims to make, but in the interest of providing further light on the issue I wanted to respond."
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