3 Emerging Trends That Are Leading To Bankruptcy in 2023
Although credit card debt, personal loan debt, and mortgage arrears are still the most common reasons for a bankruptcy filing, online gambling, dating scams, and failed debt consolidation plans are becoming increasingly prominent reasons for a potential bankruptcy filing. In 2006 when Sadek and Cooper began its practice of debt relief law; online gambling and online dating did not exist on a mainstream basis as it does today.
Moreover, debt consolidation was provided on a more local level rather than by the large national providers that currently dominate the debt consolidation field today. Unfortunately, the need for bankruptcy has exponentially grown along with the debt derived from online gambling, online dating, and debt consolidation.
Online gambling is comprised of sports betting, casino games, lottery, bingo, poker, and more. The Covid-19 Pandemic catapulted the online gambling industry to $81 billion in 2022 and the industry is expected to grow at a rate of 9.2% to $115 billion in 2026.
Although mobile phones already account for 80% of online casino users, the advent of virtual reality is aiding the growth of the online gambling market even further. With a virtual reality headset, users can “visit” a casino or sports venue for the purposes of betting. The VR experience is most realistic without leaving the comfort of one’s home. However, the futuristic experience can prove to be extremely costly. It is estimated that the average gambler has between $15,000 to $90,000 worth of debt. Unfortunately, with the ease and convenience of online gambling, this figure can increase exponentially.
Such a sum of debt, especially combined with basic expenses, such as a mortgage or rent payment, vehicle expenses, and basic living expenses, is simply just not affordable. The first step for someone struggling with gambling or online gambling is to call 1-800-GAMBLER for help. Subsequent to counseling and ceasing gambling, then it is time to consider a debt relief strategy for help. Sadek and Cooper is well versed in assisting with debt resolution strategies, such as bankruptcy throughout New Jersey and the Greater Philadelphia area.
Online Dating Scams
Online dating scams or romance scams can prove to be extremely costly and result in an enormity of debt. Online dating scams are facilitated by a fake online profile who appears to be very aggressive to move a relationship forward but is never available to meet in person or via video chat. It is also common for the scammer to appear as a person with extraordinary financial means of their own.
Often, the scammer appears to be an expert in Crypto-Currency or NFTs (Non-fungible tokens) and lulls the scam victim to invest in the scam under the guise of investing and building wealth together. However, usually, through a series of fake applications or sites the money is not invested and is transferred from the victim to an unknown account and is forever lost. In 2021 victims of romance scams lost $547 million which is substantially more than the $87 million lost in 2017 according to CNBC.
Our law office has seen individual losses exceed $100,000 as a result of dating scams. The amounts lost are often times borrowed via credit cards and personal loans, leaving the victim without any “investment,” as promised, and responsible for the debt incurred as a result of the scam. If you are an unfortunate victim of a dating scam, call the experienced lawyers of Sadek and Cooper, we look forward to helping you.
Failed Debt Consolidation Plans
Our law office routinely practices debt consolidation when such a strategy is most fitting for a client. Generally speaking, a debt consolidation plan is most effective when there is a relatively high disposable income in relation to the subject debt.
The mechanics of a debt consolidation plan work by the borrower putting money on a regular and monthly basis into an escrow account which is earmarked for the ultimate settlement of the debt. The escrow account is ultimately used to settle credit card debts or personal loans.
Generally, lawsuits, judgments, tax debts, and mortgage or vehicle arrears are not included in a debt consolidation plan. The issue with large-scale debt consolidation is that the debt often rises at a faster pace than the debt consolidation participant is adding to their escrow account thereby making an affordable “global” settlement with all of the creditors unaffordable.
Oftentimes, even if one is in the midst of a debt settlement or consolidation plan a creditor emerges and files a lawsuit because they are not being paid or not being paid at a pace that is satisfactory with the original contractual loan agreement.
If you are in a debt consolidation plan and one of the following is occurring, you should reach out to the attorneys at Sadek and Cooper for a free initial consultation regarding all of your debt relief options:
- You are still being collected against or being sued by a debt collector,
- Not seeing your overall debt decrease after paying your monthly payments,
- You are incurring new debt to fund the debt consolidation plan or
- You are burdened with other debts that are not or can not be included in the consolidation plan.
If you are burdened by debt resulting from online gambling, romance dating scams, or a failed consolidation plan and are located in the Greater Philadelphia Area or in New Jersey, please call the debt relief attorneys of Sadek and Cooper at 215-545-0008 (PA) or 856-890-9003 (NJ) to schedule a free and confidential consultation. Learn more about Chapter 13 bankruptcy as a solution for your debt. We look forward to helping you!