Filing for bankruptcy involves filling out numerous bankruptcy forms. On them, you'll explain your financial situation so that the court, trustee, and creditors know:
Of course, listing debt—called a claim in bankruptcy—is a pretty important part of the process.
Not only will you disclose the creditor name and amount you owe, but you'll explain whether an issue needs resolving before paying the claim. You'll do this by labeling the claim contingent, unliquidated, or disputed.
(Learn about other claim labels you'll need to know in Types of Creditor Claims in Bankruptcy: Secured, Unsecured & Priority.)
In most cases, you won't run into a problem when listing your bankruptcy claims. There won't be any outstanding issues you could raise to get out of paying the debt. You simply owe the money.
For instance, if you're behind on your car loan, the claim would be for the total amount you owe. Similarly, if you owe credit card debt, the claim would be for the total balance.
Sometimes the amount you owe to a creditor isn't easy to figure out. Perhaps the amount you owe could depend on what someone else does or might not be determined yet. Or, you and the creditor might disagree as to how much you owe.
If any of these is the case, you'll indicate it when listing that claim on your bankruptcy papers (the form has checkboxes).
Here's what each term means.
It's common for someone to want to omit a claim from the bankruptcy paperwork for one reason or another. You can't do it. You're required to list all claims—both the claims you think you owe, and those others think you owe.
It's in your best interest to do so. If you fail to list a claim, the claim might not be erased (discharged) in your case—even if it qualifies as a dischargeable debt.
If money is available to pay creditors, here's what will happen next:
Keep in mind, however, that each situation is unique. If you aren't clear what will happen to claims in your bankruptcy case, you'll want to meet with a knowledgeable bankruptcy lawyer.
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