When you file for bankruptcy, you fill out a large packet of forms in which you provide detailed information about your debts, property, and finances. On several of those forms, you must indicate whether a claim (essentially a debt) is contingent, unliquidated, or disputed.

Here’s what those terms mean.

Listing Debts on Your Bankruptcy Papers

You must list all of your debts on your bankruptcy papers. Debts are often referred to as claims (because the creditor has a claim to this money).

Often, the amount of the claim is straightforward. For example, if you are behind on your car loan, the amount of the claim is the amount of the total debt you owe. Similarly, if you owed your landlord back rent, the claim is the amount of rent due to the landlord.

When the Claim Amount Is Not Straightforward

Sometimes the amount you owe to a creditor is not easy to figure out. The amount you owe may depend on what someone else does or may not be determined yet. Or perhaps you and the creditor disagree as to how much you owe.

If any of these is true for one of your debts, you must indicate this on your bankruptcy papers.

Here’s what each of these terms means.

• Contingent. The claim depends on some event that hasn’t yet occurred and may never occur. For example, if you cosigned a secured loan, you won’t be liable unless the principal debtor defaults. Your liability as cosigner is contingent upon the default.
• Unliquidated. This means that a debt may exist, but the exact amount hasn’t been determined. For example, say you’ve sued someone for injuries you suffered in an auto accident, but the case isn’t over. Your lawyer has taken the case under a contingency fee agreement—the lawyer will get a third of the recovery if you win, and nothing if you lose—and has a security interest in the final recovery amount. The debt to the lawyer is unliquidated because you don’t know how much, if anything, you’ll win.
• Disputed. A claim is disputed if you and the creditor do not agree about the existence or amount of the debt. For instance, suppose the IRS says you owe $10,000 and has put a lien on your property, and you say you owe $500. List the full amount of the lien, not the amount you think you owe.

Want to learn more? Check out our bankruptcy resource center.

By Listing a Debt, You Are Not Admitting That You Owe the Debt

You may think you don’t really owe a contingent, unliquidated, or disputed debt, or you may not want to “admit” that you owe the debt. But rest assured -- by listing a debt on your bankruptcy schedules you aren’t admitting anything. Instead, you are making sure that if you owe the debt after all, it will be discharged in your bankruptcy (if it is dischargeable).

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