Man made bankrupt after spending £390,000 loan on gambling

Bankruptcy Blog

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A man has been made bankrupt after borrowing hundreds of thousands of pounds to fund a gambling addiction.

The man from Leicester was handed an 11-year bankruptcy restriction order following an Insolvency Service investigation.

According to the report, the man was found to have made false representations to family and friends to obtain loan funds of around £390,000. He told creditors that the money was being used as a venture investment.

The loans were legally secure and covered by formal agreements, stating that he would hold the funds for a duration of 12 months during which time the investor would not be able to withdraw the capital invested.

It later emerged that more than £238,000 of these funds were used to finance online spread betting, while the rest was used to subsidise the man’s lifestyle.

In total, the man became insolvent with liabilities totalling £403,753.

He told the Insolvency Service that once he ran out of his own money, he turned to friends and families to continue to gamble.

After the capital had been exhausted, he sought advice regarding his financial situation and made his own application for bankruptcy in July 2017.

Commenting on the bankruptcy restriction, Gerard O’Hare, an Official Receiver at the Insolvency Service said: “Where a bankrupt has taken undue risks with creditors’ money, he should not expect to do so without repercussions, particularly when others suffer financial loss as a result.

“A bankruptcy restriction in these circumstances will serve to provide creditors with a degree of protection, and it will also act as a deterrent to the bankrupt not to act in a similar manner in the future.”