Understanding the Difference Between Contingent, Liquidated, and Disputed Bankruptcy Claims

When you file for bankruptcy, you are required to complete paperwork that gives the bankruptcy court an in-depth overview of your financial situation. This includes listing all of your creditors and debts.

While some debt information is straightforward (for example, you owe $5,000 on your Discover Card and $100,000 on your mortgage), other obligations can be difficult to quantify at the time you fill out the paperwork. Below is an overview of these special debt categories and when they may apply.

Contingent Debt

Contingent debts are liabilities that you could owe in the future, but whether or not that happens will depend on a certain event. The most common example is a debt that you cosigned. You won’t owe it as long as the other person continues to make the loan payments, but if they default, the lender could pursue you for the money.

Unliquidated Debt 

These debts are similar to contingent ones in that they are obligations that you may owe at present or in the future, but at the moment, the amount cannot be calculated. For example, you are suing your neighbor for a slip and fall injury, and your personal injury attorney is working on a contingency basis, meaning that they get a percentage of your settlement or award. The case is still in progress, so you don’t know how much you will owe your attorney, making it an unliquidated debt.

Disputed Debt

If a creditor claims that you owe a certain amount but you disagree with the total or even the claim itself, the debt is a disputed one. You must, however, have a legal basis for the dispute: it can’t be a simple case of being unable to pay it. For example, Visa is pursuing you for an unpaid balance but you never owned a Visa card.

It is important to note that listing these types of debts on your bankruptcy paperwork does not mean that you agree to them or actually owe them. The point is to list all claims that your bankruptcy may be able to discharge. For example, if your brother is current on the loan you cosigned but later defaults, you could seek a discharge of this future obligation. If you left it out, the creditor may be able to bring a collection action against you even after your case is finished.

Contact an Oklahoma Bankruptcy Attorney

At the Law Offices of B. David Sisson, our goal is to ensure that clients get the fresh start that they need. We will help you create a complete and accurate list of all your debts, so that nothing comes back to haunt you after you get your discharge and start rebuilding. Attorney Sisson is board-certified in bankruptcy law and provides direct and personal assistance to all clients during the completion of their bankruptcy petition, so that nothing is left to chance. To schedule a consultation today, please contact us.

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