For the most part, bankruptcy law is precise and straightforward, but under certain circumstances, bankruptcy law can be burdensome and complex. If you have to file for bankruptcy protection, you might often find yourself dealing with a few peculiarities in bankruptcy law.
Here are 3 such peculiarities in bankruptcy law the average layman might not understand until they have had to deal with them. These peculiar terms are line items that exist in various bankruptcy schedules you must fill out in order to file for bankruptcy protection.
Peculiarities in Bankruptcy Law Include the Contingent Claim
A contingent claim, as one of the peculiarities in bankruptcy law, is peculiar because it is valid as a bankruptcy claim only under certain circumstances. A contingent claim is where a filing debtor is a cosigner of another person’s debt, and under certain circumstances, the primary owner of the debt has the potential to default.
The claim depends on some event not yet occurring and may never occur. For instance, if you as a filing debtor cosigned a loan so your younger brother could buy a car, you won’t be liable for the debt until your brother defaults on the payments. The claim for your portion of the debt as a cosigner is contingent upon the circumstance that your brother defaults on the loan.
Contingent claims in bankruptcy law are claims that normally have not occurred before filing your bankruptcy petition. These claims are contingent on certain circumstances and must be listed in the petition schedules as potential debt under the category of contingent claim.
Peculiarities in Bankruptcy Law Include the Unliquidated Claim
The unliquidated claim, as one of the peculiarities of bankruptcy law, is peculiar because you must list these in your bankruptcy petition as debts you do not know the exact amount of at the time you file your petition. An unliquidated claim is a claim for which a specific value has not yet been determined.
For example, you may have a lawsuit pending when you file where your lawyer has taken the case contingent on the amount to be recovered. If you file for bankruptcy protection during the lawsuit, the income and debts generated by the lawsuit become the property of the bankruptcy estate. The debt to your lawyer is an unliquidated claim because you won’t know how much you owe him, if anything, until the lawsuit is concluded.
Peculiarities in Bankruptcy Law Include the Disputed Claim
The disputed claim, as one of the peculiarities in bankruptcy law, is peculiar because you must list a debt in your filing petition that is being disputed either in or out of a court of law. A claim is considered to be disputed when a creditor and you do not agree on the existence or amount of a debt. Until the debt has been legally determined valid, the claim is disputed, but it still must be listed in the bankruptcy petition.
Peculiarities in bankruptcy law like these really exist. You must list the debts, but by listing these peculiar debts you are not admitting you owe them.
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