A debtor has 14 days from the petition date (subject to extension) to file a Schedule of Liabilities. This important document lists all of the debtor’s known liabilities and the status of each liability.  If there are multiple affiliated debtors, each debtor must file its own Schedule of Liabilities.  Many of these liabilities (or “claims”) are “Undisputed”, meaning that both the debtor and the holder of the claim agree as to the nature and amount of the obligation.  When the nature or amount of a claim is unclear, the debtor will label the claim “Contingent”, “Unliquidated” and/or “Disputed”.  These simple designations allow claim holders, the court and other parties in interest to better evaluate the debtors’ financial situation, identify discrepancies and, if necessary, contest or object to a claim.

Contingent Claims

A Contingent claim is a liability that depends on an event or trigger that may or may not occur. For example, if the debtor has co-signed or guaranteed a loan, the debtor will only owe the lender money if the borrower defaults on the loan.  If the borrower pays in full, the debtor will owe nothing.  If the borrower pays in part, the debtor will owe the difference.  If the borrower skips town and fails to pay anything, the debtor will be on the hook for the entire amount.  In each case, the liability is undisputed, but dependent on whether and the extent to which the borrower pays.

Unliquidated Claims

A claim is “Unliquidated” if the debtor admits liability, but the amount owed has yet to be determined.  For example, the debtor may have been found liable in a civil lawsuit, but the judge may have yet to determine the amount of damages.  Again, the liability is not disputed, but the amount of the debt remains unknown.

Disputed Claims 

A claim is “Disputed” if the debtor and claim holder disagree about the existence or amount of an alleged liability.  The debtor must disclose any claim asserted against it as of the petition date in the amount asserted by the claim holder, even if the debtor believes the allegations are baseless or that the actual amount is lower. 

What if My Claim is Not Scheduled Properly?

There are often discrepancies between what the debtor believes it owes and the claim holder’s records.  It is every claim holder’s responsibility to review the debtor’s Schedule of Liabilities and, if necessary, take action to protect its right to recover on the value of its claim.  

A claim holder must file a Proof of Claim to assert its right to payment if (a) the claim holder disagrees with the Debtor’s characterization of its claim as Undisputed, (b) the claim is listed as “Contingent”, “Unliquidated” or “Disputed”, or (c) the claim is missing entirely from the Debtors’ Schedule of Liabilities.  While technically not required for secured or Undisputed claims, claim holders are often advised (out of an abundance of caution) to file a “Proof of Claim” for each claim they hold against the Debtor to ensure their rights are protected in the bankruptcy case. 

Each Proof of Claim includes a Proof of Claim Form that describes the claim and a supporting attachment that justifies the claim holder’s right to recovery from the claim holder’s perspective.  

» Learn what information you need to file a Proof of Claim

Often a creditor’s Proof of Claim will assert a higher amount than the debtor’s schedules. This could be due to checks issued on the eve of bankruptcy that later bounced, such that the debtor’s books reflect payment, but the claim holder never recovered the funds.   

Can the Debtor Contest My Scheduled Claim or Proof of Claim?  

When a Proof of Claim is filed, the debtor will review the submission, seek to reconcile any discrepancy between the Proof of Claim and the debtor’s Schedule of Liabilities and determine whether to object to the Proof of Claim.  The debtor may object based on the substance of the allegations or defects in the Proof of Claim submission.  

» Learn how to avoid common mistakes when filing your Proof of Claim

If the debtor disputes a scheduled claim or has grounds to contest a Proof of Claim it can seek to have the claim “disallowed” by filing an objection with the court. 

How does the Court Reconcile a Disputed Claim?

The bankruptcy judge will hear arguments and evidence from each of the debtor and the claim holder as to why the claim should or should not be allowed.  If the court agrees to “disallow” the claim, the claim holder will not be entitled to receive any recovery on account of the claim and the claim will be discharged permanently at the conclusion of the bankruptcy case.

Claim Status Checklist for Smart Claim Holders

✅ Review the debtor’s Schedule of Liabilities

✅ Confirm the amount and status of each claim 

✅ Prepare your Proof of Claim with our helpful guide

✅ File your Proof of Claim

» Consult our Guide for After Filing Your Proof of Claim to evaluate your options