Today, I’ll answer the question: “I’m filling out my schedules, and the forms are asking if the claims against me are contingent, liquidated, or disputed. What does that mean?”

A claim is liquidated if it’s a sum certain; that’s the phrase we use in the law. If we can look at a promissory note and see that, based upon all of the payments that have been made, the sums that are due under the note, the interest rate, the number of days since default, and those kinds of things, we can identify the exact amount that is due. But if we can’t exactly determine the amount that is due under that claim, that’s called an unliquidated claim. When you cannot determine the amount due for that claim, you have to go to court and bring evidence to determine the amount of your damages. An example of a classic unliquidated claim is when there’s been an automobile accident, or any other tort claim, and you have to figure out what the damages are. The same thing is true in most breach of contract claims where the other side has defaulted. Then we have to figure out how the performing side has been damaged. Courts are going to take evidence to determine the amount of that claim and will liquidate that claim.

My name is Ron Drescher and I’m an attorney practicing bankruptcy and commercial litigation. If you have a question about whether or not your claims are liquidated, disputed or contingent, please pick up the phone and call me at 410-484-9000. I’d love to hear from you.