Have you ever wondered if you actually owed a certain amount of money to a creditor? Have you ever had cases where you just weren’t sure whether you had been charged, whether your payment had been accepted, or if you were responsible for any debt at all?
For many debts, it is not difficult to find out what you owe. Your creditor makes it easy for you by sending a statement, usually monthly, outlining your expenses, the interest that has accrued, any fees you incur, payments you made during the billing cycle, and the balance.
What if you had an account that you knew were responsible for you, but no one had yet been able to find out how much you actually owe so that you could pay it off?
What we are talking about is whether the debt will be liquidated. A debt is liquidated when the amount owed is certain. This certainty can come from an agreement between the borrower and the lender on the amount owed, it could come from the terms of a contract, or it could come as a result of a lawsuit.
Unliquidated vs. Controversial or contingent debt
It is closely related to the term liquidated debt dispute and contingency.
A debt is denied when an element of the contract or an agreement between the parties is unclear. A party can deny that it has no responsibility for the debt at all. The borrower can contest the balance because he did not get credit for the payments he made.
A debt is a quota if an event must occur before the debtor is liable for the debt. A typical example is a guarantor; The surety agrees to pay the debt, but only if the primary borrower does not play a payment or does not otherwise meet the terms of the agreement.
A debt cannot be settled, controversial or contingent. It could be two of them or all three.
Liquidates debt into bankruptcy
The state of the debt is important in the context of a bankruptcy case. Debt must be safe or liquidated before an insolvency administrator pays a claim. Likewise, no dispute or contingency may be pending.
Examples of liquidated and unliquidated debts
Here are some examples of liquidated and unsettled debts. Guilt can come from many sources. For our purposes, let’s look at tort, which are civil offenses that cause harm to others or property of others. We will also look at the debts that result from a contract.
Liquidated contractual debt
The car loan: unliquidated debts are not limited to accident situations. They can occur when a contract is involved, too. So you borrowed money to buy a car. They have a contract that requires you to pay $ 300 a month for 36 months for a total of $ 10,800. I would argue that this amount will be liquidated. But after some time you come in with a little money and you decide to use it early to pay off the loan. In the end, you have to pay a total of $ 9,500. This is also a liquidated amount because it is easy to calculate and you and the lender agree that what you owe.
Think about what happens when you lose your job and are unable to make payments. The lender repossesses your car and puts it on sale. If the lender doesn’t get enough of paying your debts from the sale, you will be responsible for the difference that remains-the-lack. Until the car is sold, the debt will not be settled because neither you nor the lender know how much you will end up being due. There is also a contingency in there. It is possible, though very unlikely, to bring the sale in enough to pay the loan in full. So the contingency is whether the sale of the loan pays off.