What does Contingent Claim mean?
A contingent claim is valid as a bankruptcy claim only under certain circumstances. Contingent claims in bankruptcy law are claims that normally have not occurred before filing the 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.
For example, one type of 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. Because a contingent claim is dependent on a specific action occurring, there is a chance it will never occur. For instance, if a filing debtor cosigned a loan so their child could buy a car, the cosigner will not be liable for the debt unless their child defaults on the payments. The claim for the debtor's portion of the debt as a cosigner is contingent the child defaulting on the loan.
If you have questions about your debts and whether or not they are contingent, talk to a bankruptcy lawyer.