Deciding to file bankruptcy is not easy, but this is often the best solution for obtaining debt relief. During the process, you will be required to fill out a variety of paperwork detailing your financial situation, creditor information, and debts, which are referred to as claims. As part of this procedure, you must appropriately label every claim so the bankruptcy trustee can easily determine how to pay your creditors when money becomes available. A bankruptcy lawyer can help identify the type of debts you have, but it’s important that you’re also able to make the distinction. Below is a brief guide to each kind of claim.

How Your Claims May Be Listed in Bankruptcy 

Contingent

Contingent debts are those owed to a creditor depending on an event that has yet to occur. This includes debts that may never arise because the event isn’t guaranteed to take place. The most common example of contingent debt would be a debt that someone else owes but for which you co-signed, as in the case of a loan or lease agreement. You wouldn’t become liable for the debt unless the primary debtor defaulted.  

Unliquidated 

Unlike contingent debts, unliquidated debts already exist, but the exact amount owed has not been determined. For instance, you may be involved in a personal injury lawsuit that has the potential to result in a monetary judgment, upon which you will be responsible for paying your attorney, but the judge or jury has yet to rule on your case. Your debt will remain unliquidated until it’s given a specific value.  

Disputed 

Disputed debts are debts you disagree that you owe or believe you owe a different amount on. This can happen when a credit card issuer says you still carry a balance but you think you paid it off, or if the IRS claims you owe a certain amount of taxes and you’re convinced you don’t owe that much. Although it’s disputed, your bankruptcy lawyer will list the debt so it can be properly resolved during your case.

It’s crucial to list your debts correctly, as this is the only way they will be eligible for discharge. Your bankruptcy lawyer will prove instrumental in helping you fill out all the necessary paperwork, which is why southern Alabama residents turn to the experienced legal team at Padgett & Robertson, Attorneys at Law. For more than 35 years, they have been successfully guiding clients through the bankruptcy process. They know the ins and outs of the bankruptcy code and will ensure all the information provided in your petition is accurate. To discuss your financial goals with a trusted bankruptcy lawyer, call (251) 342-0264. You can also visit their website to request a free consultation.

No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.

We are a debt relief agency. We help people file for Bankruptcy relief under the Bankruptcy Code.