Filing for personal bankruptcy can relieve your debts and give you a fresh start. While most bankruptcy cases are straightforward, there are some situations where a claim might require special consideration. To help you navigate complicated cases and terminology, here’s a guide to the different types of bankruptcy claims and what they mean.

Types of Bankruptcy Claims

1. Contingent

A contingent claim in personal bankruptcy is one in which payment of the claim is conditional. This means that payment depends on an event that has not happened yet or may not happen at all. For example, if you cosigned a mortgage loan for someone else, you wouldn't be responsible for paying the amount during their bankruptcy because they are the primary borrower. Only if they default do you have to assume the loan as your own.

2. Unliquidated

With an unliquidated claim, you don't know how much you owe on a certain debt. For instance, someone who is involved in an ongoing lawsuit may not know their financial obligations. A bankruptcy case can’t end until a claim is liquidated, so an attorney will monitor the process and keep you informed so the issue can be resolved as soon as the final debt amount is determined.

3. Disputed

A disputed claim occurs when you and your creditor do not agree on the amount owed. A common example is when the IRS says you owe an amount, but your tax returns tell another story. Your attorney will list the full amount the IRS is claiming and explain the situation on your behalf when you dispute it.

If you encounter any of these issues in a personal bankruptcy, call the attorneys at Brian R. Cahn & Associates in Northwest Georgia, Bartow, Whitfield, Murray, Gordon, Bartow, and Paulding Counties. Brian Cahn has over 25 years of experience handling Chapter 7, Chapter 11, and Chapter 13 bankruptcy cases, and can help you navigate any situation. Visit his website to learn more about bankruptcy, or call (770) 382-8900 to schedule a consultation.