§ 17.1     Disputed Debts
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 17.1, at ¶ ____, LundinOnChapter13.com (last visited __________).

Only noncontingent, liquidated debts are counted for purposes of the eligibility limitations for Chapter 13 in § 109(e).1 It is often said that a disputed debt is counted toward the eligibility limits in a Chapter 13 case—that disputing a debt does not render the debt either contingent or unliquidated.2


The word “disputed” does not appear in the eligibility sections for Chapter 13. It is unfortunately common for debtors’ counsel to check the box for disputed in Schedules D, E and F of Official Forms 106D and 106E/F3 without considering that only the boxes for contingent and/or unliquidated have special meaning in Chapter 13 cases. In a Chapter 9 or Chapter 11 case, scheduling a debt as “disputed” disables the Code and Rules provisions that “deem filed” the claims of regularly scheduled creditors.4 There is no analogous Code section or Rule in a Chapter 13 case. The practice of listing debt as disputed in a Chapter 13 case is not effective to exclude the debt from the eligibility calculation. And because “disputed” is not a term of art in Chapter 13 practice, its use to describe debt is confusing and counterproductive.


Discussed in more detail above,5 there is disagreement, especially in the Ninth Circuit, whether disputed liability is relevant to whether a debt is liquidated for § 109(e) purposes. Many courts have made the point that a dispute about the amount of a debt puts at issue whether the debt is liquidated.6 But a dispute with respect to liability does not necessarily implicate any of the generally accepted tests for debt counting under § 109(e): disputed liability renders a debt neither contingent nor unliquidated for eligibility purposes.7 For example, as stated by the Ninth Circuit in Slack v. Wilshire Insurance Co. (In re Slack),8 “the mere assertion by the debtor that he is not liable for the claim will not render the debt unliquidated for the purposes of calculating eligibility under § 109(e).”


Although disputed debt is not automatically eliminated from the eligibility calculation in a Chapter 13 case, several courts have acknowledged that at some level the quality of a dispute puts in question whether the debtor is liable for any amount.9 At one extreme, if the dispute eliminates all “right to payment,” there is no claim for bankruptcy purposes10 and no debt to be counted toward eligibility.11 The struggle comes when the debtor schedules a substantial debt in an amount that is easily ascertainable12 and the debtor earnestly disputes liability. On approximately these facts and notwithstanding the contrary statements from the Ninth Circuit, the Bankruptcy Appellate Panel for the Ninth Circuit in Ho v. Dowell (In re Ho)13 concluded that disputed liability is relevant to whether a debt is liquidated for § 109(e) purposes.


In Ho, the debtor scheduled the debt of a corporation in which the debtor was an officer and shareholder. The corporation had been sued before bankruptcy, but the debtor was not named as a defendant. The amount owed by the corporation could be ascertained to the penny. The debtor vigorously disputed personal liability.


The Bankruptcy Appellate Panel for the Ninth Circuit acknowledged that the usual tests for “liquidated” in § 109(e) would find the debt in Ho to be liquidated because the amount of the debt was easily calculated. Also, all of the events giving rise to liability, if there was liability, occurred before the petition, making the debt noncontingent.14 Technically, the debt was noncontingent and liquidated and should be counted. But the BAP held that the debt was unliquidated because, “[w]hile a dispute as to liability will not ‘necessarily render a debt unliquidated,’ . . . the nature of this dispute does.”15 This conclusion arguably puts the Ninth Circuit BAP at odds with its own court of appeals and has quickly generated contrary authority.16


What is clear from these cases is that just disputing a debt is not an effective way to resolve whether a debt is counted for § 109(e) purposes in a Chapter 13 case. Counsel should instead determine whether the dispute fits into a category for exclusion recognized in the statute—contingent or unliquidated. If the dispute concerns whether the debtor’s liability is conditioned on the occurrence of future events (other than the mere passage of time or entry of a court judgment), then the debt should be listed as contingent.17 If the dispute concerns the amount of the debt, then the debt should be scheduled as unliquidated.18 If both challenges apply, then the debt should be listed as contingent and unliquidated. If the dispute renders the debt contingent or unliquidated, then the debt is not counted toward the debt limits.19


Listing a debt as only disputed in a Chapter 13 case suggests the weakness of the underlying position. It is strategically foolish and will not carry the debtor’s burden of proof to exclude the debt from the eligibility calculation. The creditor challenging eligibility is on firm ground to argue that all disputed debts are fully counted.


1  See 11 U.S.C. § 109(e), discussed in § 14.1  Dollar Amounts, § 15.1  What Is Noncontingent Debt? and § 16.1  What Is a Liquidated Debt?.


2  Sylvester v. Dow Jones & Co. (In re Sylvester), 19 B.R. 671 (B.A.P. 9th Cir. Feb. 9, 1982) (Hughes, Katz, Volinn) (Disputed debts are included for purposes of calculating eligibility under § 109(e).). Accord Slack v. Wilshire Ins. Co. (In re Slack), 187 F.3d 1070, 1074–75 (9th Cir. Sept. 9, 1999) (Reavley, Alarcon, McKeown) (“[T]he mere assertion by the debtor that he is not liable for the claim will not render the debt unliquidated for the purposes of calculating eligibility under § 109(e). . . . ‘[T]he concept of a liquidated debt relates to the amount of liability, not the existence of liability.’ . . . Even if a debtor disputes the existence of liability, if the amount of the debt is calculable with certainty, then it is liquidated for the purposes of § 109(e).”); Mazzeo v. United States (In re Mazzeo), 131 F.3d 295, 304 (2d Cir. Dec. 3, 1997) (Kearse, McLaughlin, Godbold) (“A responsible person’s liability for unpaid withholding taxes is imposed by statute. Mazzeo, [Westfield Financial Corporation’s] president, either was a responsible person or he was not; but his status did not depend on any event that had not occurred prior to the time he filed his Chapter 13 petition. We conclude that his debt to the State, though disputed, was not contingent.”); In re Knight, 55 F.3d 231 (7th Cir. May 3, 1995) (Coffey, Ripple, Skinner) (A disputed claim is “nevertheless a claim” and is counted toward the eligibility calculation notwithstanding that the debtor disputes altogether whether he owes the debt. Civil penalty for the debtor’s failure to report traffic convictions is a “debt,” is a “claim” and is included in the eligibility computation notwithstanding the debtor’s dispute.); Lindsey v. Cohen (In re Lindsey), No. CC-08-1287-PaDMk, 2009 WL 7751414 (B.A.P. 9th Cir. May 14, 2009) (unpublished) (Pappas, Dunn, Markell) (Debtors’ contention that banking and monetary systems in the United States are fundamentally flawed is a dispute that does not render prepetition district court judgment for unpaid income taxes contingent or unliquidated; judgment counts for § 109(e) purposes, and debtors are ineligible.); Guastella v. Hampton (In re Guastella), 341 B.R. 908 (B.A.P. 9th Cir. Apr. 11, 2006) (Lee, Marlar, Pappas) (That debtor disputes liability does not render debt unliquidated when state court tentatively found parents liable for $495,000 of damages and found that debtor conspired with parents to hide earthquake damage in sale of house; amount of debt is easily ascertainable from tentative state court judgment, and dispute does not render it unliquidated.); Sullivan v. Java Oil Ltd. (In re Sullivan), No. CIV S-06-20-LKK, 2006 WL 1686732, at *3 (E.D. Cal. June 20, 2006) (unpublished) (Karlton) (That debtor disputed liability for fraudulent litigation in Gibraltar court does not eliminate claim from eligibility calculus. Citing Scovis v. Henrichsen (In re Scovis), 249 F.3d 975 (9th Cir. May 11, 2001) (Nelson, Brunetti, Kozinski), and Slack v. Wilshire Insurance Co. (In re Slack), 187 F.3d 1070 (9th Cir. Sept. 9, 1999) (Reavley, Alarcon, McKeown), “a dispute regarding liability will not render a debt unliquidated. . . . [E]ven if Sullivan disputed liability . . . the amount demanded and awarded by the Gibraltar court was known by Sullivan at the time of his bankruptcy filing, and thus, he was obligated to list it on his schedules.”); United States v. Dallas, 157 B.R. 912, 913 (S.D. Ala. Apr. 14, 1993) (Butler) (“[T]he United States claims a secured debt of $449,510.21 that is undersecured by more than $100,000 because the debtors have assets of only $49,180. The debtors disputed the validity of the claim, but not the amount. The computation of the debt limits under § 109(e) is unaffected by whether the debt is disputed. . . . Because the amount of the claim made by the United States is readily ascertainable, its claim is liquidated within the meaning of § 109(e).”); Gould v. Gregg, Hart, Farris & Rutledge, 137 B.R. 761 (W.D. Ark. Feb. 5, 1992) (Waters); Lamar v. United States (In re Lamar),111 B.R. 327 (D. Nev. Feb. 26, 1990) (Pro) (Disputed 100% tax penalty is included for eligibility calculation purposes notwithstanding that IRS did not timely file a proof of claim.); In re Crescenzi, 69 B.R. 64 (S.D.N.Y. Dec. 4, 1986) (Haight); Craig Corp. v. Albano (In re Albano),55 B.R. 363 (N.D. Ill. Nov. 7, 1985) (Shadur); Vaughn v. Central Bank of the S. (In re Vaughn),36 B.R. 935 (N.D. Ala. Feb. 3, 1984) (Acker), aff’d, 741 F.2d 1383 (11th Cir. Aug. 15, 1984) (Table); In re Denaeyer, No. BK11-43089-TLS, 2012 WL 1605555 (Bankr. D. Neb. May 8, 2012) (Saladino) (Merely disputing amount owed did not render debt contingent or unliquidated; debt was readily calculable and liquidated. Case dismissed for exceeding unsecured debt limit.); In re Henne, 359 B.R. 776 (Bankr. D. Ariz. Jan. 8, 2007) (Disputed IRS claim exceeded unsecured debt limit. Debtor argued that taxes were discharged in prior Chapter 7 case. Under § 523(a)(1), taxes were not discharged since debtor failed to show “honest and reasonable attempt to comply with the tax law.” Disputed submissions to IRS were not “returns” for purposes of § 523(a)(1)(B).); In re Tucker, 345 B.R. 373 (Bankr. M.D. Ala. May 11, 2006) (Williams) (Applying United States v. Verdunn (In re Verdunn), 89 F.3d 799 (11th Cir. 1996), tax debts for prepetition tax years are liquidated notwithstanding that the debtor disputes liability.); Al-Sedah v. Alabama Dep’t of Revenue (In re Al-Sedah), 347 B.R. 901 (Bankr. N.D. Ala. July 19, 2005) (That debtor disputes tax liability finally determined by an administrative law judge before the petition does not render the debt contingent or unliquidated.); In re Corson, No. 03-18160F, 2004 WL 5865045 (Bankr. E.D. Pa. June 25, 2004) (unpublished) (Fox) (Disputing liability does not make debt either contingent or unliquidated. Allegation that one debt had been “written off” by creditor did not mean that debt was satisfied. Another creditor’s decision to reduce claim in light of bankruptcy filing did not change debtor’s liability for full amount owing when bankruptcy was filed. Dispute over amount of auto repair bill and creditor’s failure to return phone calls did not make debt contingent or unliquidated. When unsecured debt exceeded statutory limit, debtor was ineligible to file Chapter 13, and court was required either to dismiss or convert case, whichever was in best interests of creditors and bankruptcy estate. Case was converted to Chapter 7.); In re Pinckney, No. 08-10247PM, 2008 WL 2033686 (Bankr. D. Md. May 9, 2008) (Mannes) (Disputing claim does not make claim contingent and unliquidated; case is dismissed for ineligibility unless debtor voluntarily converts to another chapter.); In re Murphy, 374 B.R. 73, 76–77 (Bankr. W.D.N.Y. Aug. 29, 2007) (Ninfo) (That debtor disputes prepetition legal fees does not make debt contingent or unliquidated: “the existence of a dispute over either the underlying liability or the amount of the debt does not automatically render the debt either contingent or unliquidated, and disputed debts are included in the calculation of the amount of debt for Section 109(e) eligibility purposes.”); In re Margetis, No. 07-33657-SGJ-13, 2007 WL 4410388 (Bankr. N.D. Tex. Dec. 14, 2007) (unpublished) (Jernigan) (Dispute of “voidable” judgment does not make claim unliquidated. Judgment was entered during prior Chapter 13 case, but judgment creditor had no notice of that case because of debtor’s failure to schedule. Under Sikes v. Global Marine, Inc., 881 F.2d 176 (5th Cir. Aug. 25, 1989) (Rubin, Politz, Johnson), judgment taken in violation of prior automatic stay is not void but voidable. Debtor’s attempt in current case to void two-year-old default judgment would be unfair to creditor that was unscheduled in prior case. Applying laches, debtor is ineligible.); In re Smith, 325 B.R. 498, 504 (Bankr. D.N.H. Apr. 15, 2005) (Deasy) (“A dispute over the underlying debt does not preclude inclusion in a section 109(e) analysis as long as the debt is otherwise non-contingent and liquidated. . . . The Court will include readily ascertainable amounts in the eligibility determination even if the liability is disputed.”); In re Huelbig, 299 B.R. 721 (Bankr. D.R.I. Oct. 1, 2003) (Votolato) (Rejecting Ho v. Dowell (In re Ho), 274 B.R. 867 (B.A.P. 9th Cir. Mar. 13, 2002) (Perris, Brandt, Klein), insurance fraud debt is liquidated notwithstanding that the debtors vigorously dispute liability because amount of claim can be calculated using simple arithmetic based on checks attached to a proof of claim.); In re Rohl, 298 B.R. 95, 103 (Bankr. E.D. Mich. Sept. 3, 2003) (Shefferly) (That the debtor disputes liability does not render debts unliquidated for eligibility purposes. “[T]he Court is persuaded by the reasoning in In re Dow Corning Corp., 215 B.R. 346 (Bankr. E.D. Mich. [Nov. 20,] 1997) [(Spector),] . . . that ‘every circuit and nearly every other court required to decide the issue has held that a claim is liquidated if its value can be readily ascertained whether or not the debtor’s underlying legal liability on that claim is in dispute.’”); In re Vaughn, 276 B.R. 323, 326 (Bankr. D.N.H. Apr. 5, 2002) (Vaughn) (Claims for fraud, RICO, conspiracy and breach of contract are liquidated notwithstanding that debtor disputes liability. “‘[T]he concept of a liquidated debt relates to the amount of liability, not the existence of liability.’ . . . Although the Debtor disputes whether he is liable on his unsecured debts stemming from the Michigan and Ohio law suits, the issue of whether a debtor is liable for a particular debt is separate from whether that debt is liquidated as of the filing date for purposes of § 109(e).”); In re Hanson, 275 B.R. 593, 596 (Bankr. D. Colo. Apr. 3, 2002) (Brown) (“‘The majority of courts considering the question have held that merely because a debtor disputes a debt, or has potential defenses or counterclaims that might reduce the creditors’ actual collection, the debt is not thereby rendered “contingent” or “unliquidated.”’”); In re Reader, 274 B.R. 893, 896 (Bankr. D. Colo. Mar. 26, 2002) (Brown) (Claim for misappropriation from probate estate is not rendered contingent or unliquidated “merely because a debtor disputes [the] debt.”); In re Faulhaber, 269 B.R. 348, 354–55 (Bankr. W.D. Mich. Nov. 7, 2001) (Hughes) (That debtor disputes liability for securities account churning does not render the claim contingent or unliquidated. “Debtor concedes that ‘all factual events surrounding Debtor’s alleged misconduct occurred prior to the filing.’ . . . [A]n actual determination of liability is not required to make the claim non-contingent. . . . The broad consensus among . . . courts is that the debtor’s liability is irrelevant to the determination of whether a debt is liquidated or not. . . . [A] liquidated debt is any debt which is reasonably ascertainable as to amount regardless of whether the debtor’s underlying liability is in dispute.”); In re Stern, 266 B.R. 322, 327 (Bankr. D. Md. Aug. 13, 2001) (Schneider) (“[M]erely because the debtor labeled the BARCODING.COM claim as ‘disputed’ did not make it so, where the state court already adjudicated it and entered a money judgment on it against the debtor. Even claims that are disputed as to liability must be counted in determining the debtor’s eligibility for Chapter 13 relief.”); In re Mitchell, 255 B.R. 345 (Bankr. D. Mass. Nov. 15, 2000) (Feeney) (Debtors are ineligible based on prepetition state court judgment for $275,000 notwithstanding that the debtors dispute the judgment, have appealed the judgment and the judgment on appeal is not entitled to preclusive effect under California law.); In re Hendricks, 250 B.R. 415, 419 (Bankr. M.D. Fla. Mar. 28, 2000) (Jennemann) (“The disputed nature of the claims is not relevant to determination of Section 109 eligibility.”); In re Visser, 232 B.R. 362, 364 (Bankr. N.D. Tex. Mar. 23, 1999) (McGuire) (Disputed debts for misappropriation are liquidated based on debtor’s admission that he misappropriated $240,000. “‘The general rule is that disputed debts should be included in the § 109(e) debt calculations. . . . It is the character of the debt and not of any defense that determines whether a debt is liquidated. The existence of a dispute over part or all of a debt does not convert the debt from a liquidated one to an unliquidated one.’”); In re Tabor, 232 B.R. 85, 89 (Bankr. N.D. Ohio Mar. 29, 1999) (Shea-Stonum) (“Although a debtor may dispute a claim, the disputed status of a claim that is otherwise noncontingent and liquidated is not a basis to exclude it from the § 109(e) jurisdictional calculation.” Both Mr. and Mrs. Tabor disputed liability on notes. With respect to Mrs. Tabor, notes were unliquidated because Mrs. Tabor was not a promissor. After a hearing, the court determined that Mr. Tabor was liable on the notes notwithstanding an ambiguous signature in an individual and corporate capacity. Mrs. Tabor’s dispute with respect to liability rendered the debt unliquidated notwithstanding the amount of the debt was readily determinable.); In re Berenato, 226 B.R. 819 (Bankr. E.D. Pa. Oct. 29, 1998) (Scholl) (Debtor not eligible because scheduled IRS liability of $338,000, IRS filed a proof of claim for $461,647.08 and debtor’s dispute about “responsible person” liability does not render the debt either contingent or unliquidated.); In re Brooks, 216 B.R. 838, 842 (Bankr. N.D. Okla. Jan. 5, 1998) (Michael) (Notwithstanding that debtor “vehemently disputes” the IRS claim, tax debt is liquidated. “Brooks . . . contends that extensive evidentiary hearings will be necessary to determine his liability, if any, for the IRS Claim. Brooks cannot ‘shoehorn’ himself into eligibility under chapter 13 merely by disputing a debt owed to the IRS.” Adopts “majority view” from United States v. Verdunn, 89 F.3d 799 (11th Cir. July 31, 1996) (Kravitch, Carnes, Hill), that a vigorous dispute and need for an evidentiary hearing are not sufficient to render a prepetition tax liability unliquidated.); In re Ekeke, 198 B.R. 315 (Bankr. E.D. Mo. June 14, 1996) (Schermer) (That the debtors dispute tax claims does not render those claims either contingent or unliquidated. Prepetition tax claims are noncontingent under In re Knight, 55 F.3d 231 (7th Cir. May 3, 1995) (Coffey, Ripple, Skinner), because all the events upon which the claims are based occurred prior to the filing date. The tax claims are unliquidated because an IRS witness put on a prima facie showing of the validity of the proof of claim and the amount of the debts is easily ascertainable. The debtors’ argument that some or all of the tax debts were discharged in a prior Chapter 7 case creates a dispute but does not render the debts contingent or unliquidated. Although “Debtor vigorously disputes” the IRS’s position that taxes are nondischargeable under § 523(a)(1)(C), “they have never sought determination that this liability was discharged. Thus, the IRS claim is disputed but neither discharged under § 523(a)(1) or unliquidated. Accordingly, the tax liabilities from 1987 through 1990 are included in the § 109(e) computation.”); In re Redburn, 193 B.R. 249, 257 (Bankr. W.D. Mich. Feb. 29, 1996) (Gregg) (To determine eligibility under § 109(e), “it is immaterial whether or not the debt is ‘disputed’. . . . Rather, the proper inquiry is whether the unsecured debts are ‘liquidated’ and ‘noncontingent’ as required by the statute.” Because the claims are based on a prepetition state court judgment, the claims are “liquidated.” That the claims are the subject of unresolved nondischargeability litigation in a simultaneously pending Chapter 7 case does not render the claims “contingent” because all of the events necessary to hold the debtor liable occurred before the petition.); In re Johnson, 191 B.R. 179, 182 (Bankr. D. Ariz. Oct. 5, 1995) (Case), and 191 B.R. 184, 185 (Bankr. D. Ariz. Jan. 12, 1996) (Case) (“The fact that the claim will be further disputed on appeal does not make it unliquidated or contingent.”); In re Sivertsen, 180 B.R. 513, 514 (Bankr. N.D. Ill. Dec. 27, 1994) (DeGunther) (That the debtors dispute the debt of the IRS and have filed an objection to the IRS’s proof of claim does not exclude the debt from the § 109(e) computation. “The Court has reviewed the IRS Proof of Claim, and the methods utilized by the IRS to determine the correct amount of the claim. The fact that the Debtors failed to pay taxes for several years does not render the task of computation an easy one. At times estimates may have to suffice. Nevertheless, the process utilized by the IRS appears to be sound, was performed in good faith, and must be respected.”); In re Sitarz, 150 B.R. 710, 725 (Bankr. D. Minn. Feb. 18, 1993) (Kishel) (That the debtor disputes the unsecured claim of a former employer from whom the debtor embezzled and fraudulently misappropriated funds does not upset the eligibility calculation. “It does not matter that the Debtor disputes his liability for any amount over $30,000.00. A disputed unsecured claim is properly aggregated with undisputed unsecured claims to arrive [at] the total of a class of debt for an eligibility determination under § 109(e).”); In re Jordan, 166 B.R. 201, 202 (Bankr. D. Me. Feb. 14, 1994) (Goodman) (Claim that the debtor misappropriated approximately $280,000 from a former employer is liquidated where the debtor scheduled the former employer with a “disputed” claim in the amount of $280,000 and the former employer filed a proof of claim for $288,295.74. “[T]he existence of a dispute over either the underlying liability or the amount of a debt does not automatically render the debt either contingent or unliquidated. . . . [The former employer’s] claim is noncontingent and liquidated because all events giving rise to liability occurred pre-petition and the amount of the debt can be calculated.”); In re Claypool, 142 B.R. 753 (Bankr. E.D. Va. Dec. 31, 1990) (Tice) (Liabilities of the debtor’s corporation listed as disputed in the debtor’s schedules are included in the § 109(e) eligibility calculus and render the debtor ineligible. “[T]he debtor listed specific amounts for each of the corporate debts and disputed liability on them. None of those claims appear to be unliquidated or contingent. A liquidated, noncontingent claim whose validity is in dispute must nevertheless be included in determining eligibility under § 109(e).”); In re Pennypacker, 115 B.R. 504 (Bankr. E.D. Pa. June 26, 1990) (Twardowski); In re Jerome, 112 B.R. 563 (Bankr. S.D.N.Y. Mar. 29, 1990) (Schwartzberg); In re Dally, 110 B.R. 630 (Bankr. D. Conn. Feb. 22, 1990) (Shiff); In re Teague, 101 B.R. 57 (Bankr. W.D. Ark. Apr. 16, 1989) (Fussell); In re Pulliam, 90 B.R. 241 (Bankr. N.D. Tex. June 21, 1988) (Felsenthal); In re Michaelsen, 74 B.R. 245 (Bankr. D. Nev. May 13, 1987) (Thompson); In re Hutchens, 69 B.R. 806 (Bankr. E.D. Tenn. Jan. 20, 1987) (Stair); In re Henstra, 75 B.R. 260 (Bankr. D. Minn. Mar. 31, 1986) (O’Brien); In re Williams, 51 B.R. 249 (Bankr. S.D. Ind. Jan. 24, 1984) (Bayt); In re Carson, 32 B.R. 27 (Bankr. S.D. Fla. July 21, 1983) (Weaver); In re McMonagle, 30 B.R. 899 (Bankr. D.S.D. June 3, 1983) (Ecker); In re King, 9 B.R. 376 (Bankr. D. Or. Mar. 3, 1981) (Hess).


3  See § 36.11  Schedule D—Secured Claims, § 36.12  Schedule E—Priority Claims and § 36.13  Schedule F—Unsecured Claims.


4  See 11 U.S.C. § 1111(a); Fed. R. Bankr. P. 3003(b)(1).


5  See § 16.1  What Is a Liquidated Debt?.


6  See § 16.1  What Is a Liquidated Debt?.


7  See § 15.1  What Is Noncontingent Debt? and § 16.1  What Is a Liquidated Debt?.


8  187 F.3d 1070, 1074 (9th Cir. Sept. 9, 1999) (Reavley, Alarcon, McKeown).


9  See, e.g., In re Arcella-Coffman, 318 B.R. 463, 471–73 (Bankr. N.D. Ind. Dec. 8, 2004) (Klingeberger) (“[A] dispute as to a debt does not ipso facto cause the debt to be unliquidated . . . . [T]he debtor’s mere refusal to admit liability for, and the amount of, a claim will not negate a finding that a debt exists in an amount capable of easy mathematical computation. It is the good faith of the dispute, particularly with respect to the underlying issues of the debtor’s liability—and not the statement that there is a dispute—that is relevant for the purpose of § 109(e). . . . A dispute as to liability, or as to the amount, does not, in and of itself, cause a debt to be unliquidated. The principal focus is on the ability of a factfinder to determine liability readily without extensive evidence or the exercise of judgment, and to determine the amount of the indebtedness by the application of relatively simple mathematical principles.”). See also In re Robinson, 535 B.R. 437, 448–49 (Bankr. N.D. Ga. July 22, 2015) (Sacca) (Large disputed claim filed by debtor’s former domestic relations attorney must be litigated before liquidated amount of the debt can be known, and that litigation should proceed before eligibility is determined because amount of claim would determine eligibility. “Generally, when a debt is owed pursuant to a contractual obligation it is liquidated . . . . The fact that the debtor disputed . . . liability did not necessarily make the debt unliquidated. . . . But in this case, neither party agreed to a sum certain, but instead only agreed on an hourly rate. . . . The parties did not agree to a flat fee or a minimum fee. Thus, Ms. Cohen had complete control over and was solely able to determine the amount of the claim and that amount is not only disputed, but Ms. Robinson contends that Ms. Cohen actually damaged her by the performance of those services. . . . [A] creditor that wants to prevent a party from being a chapter 13 debtor . . . could inflate its numbers in order [to] keep a debtor out of chapter 13, even though those numbers are strongly contested. That a debtor would be denied the benefits of chapter 13 in such a scenario is wholly inequitable. The contrary is also true: it would be inequitable to give a debtor the benefits of chapter 13 relief merely because she disputes a claim. Under these facts, Ms. Robinson should be given an opportunity to litigate the issue of whether she does not owe all or a portion of that debt. . . . Because Ms. Robinson’s liability to Ms. Cohen is contested, and a determination of the amount of the debt that she actually owes will result in whether or not she will be eligible to be a chapter 13 debtor, it is fair to allow the parties to finish the ongoing litigation regarding Ms. Cohen’s claim before the Court makes an eligibility determination.”).


10  See 11 U.S.C. § 101(5).


11  In re Burgat, 68 B.R. 408 (Bankr. D. Colo. Dec. 30, 1986) (Matheson) (When the dispute of a debt is basic enough to render questionable the claim holder’s right to payment, the dispute is sufficient to exclude the debt from the Chapter 13 eligibility calculation.).


12  See § 16.1  What Is a Liquidated Debt?.


13  274 B.R. 867 (B.A.P. 9th Cir. Mar. 13, 2002) (Perris, Brandt, Klein).


14  See § 15.1  What Is Noncontingent Debt?.


15  Ho v. Dowell (In re Ho), 274 B.R. at 875. See also In re Leggett, 335 B.R. 227, 231 (Bankr. N.D. Ga. Aug. 19, 2005) (Bonapfel) (Although disputed debt is not contingent or unliquidated, debtor’s liability on $1.9 million debt to client of debtor’s company must be determined since eligibility hinges upon liability. Stay is lifted and case dismissed to permit liability determination in district court.).


16  See, e.g., In re Fredricksen, 325 B.R. 302, 307, 309 (Bankr. D. Or. Apr. 11, 2005) (withdrawn from publication) (Debtor was ineligible for Chapter 13 when IRS issued notices of deficiency for $5,300,000 notwithstanding debtor’s assertion of innocent spouse defense. “The fact that debtor may be relieved of liability at some future time pursuant to 26 U.S.C. § 6015 does not render the tax debt unliquidated for purposes of § 109(e). . . . First, the determination of whether a debtor has debt in excess of the limits established in § 109(e) is made as of the petition date. Post-petition events are irrelevant. . . . Debtor had not even asserted the innocent spouse defense on the petition date. Second, the fact that debtor has a potential defense to liability does not render the tax debt unliquidated.” Following Slack v. Wilshire Insurance Co. (In re Slack), 187 F.3d 1070 (9th Cir. Sept. 9, 1999) (Reavley, Alarcon, McKeown), and distinguishing Ho v. Dowell (In re Ho), 274 B.R. 867 (B.A.P. 9th Cir. Mar. 13, 2002) (Perris, Brandt, Klein), the debtor had filed the tax return, and the debtor’s liability for the tax debt was not as “far fetched” as it was in Ho. “The general rule that disputes as to a debtor’s liability for a debt do not render that debt unliquidated applies in this case.” Further, the issuance of the notice of deficiency by the IRS demonstrated that the liability was readily determinable so as to render the debt liquidated. Although the issuance of a prepetition notice of deficiency does not per se liquidate a tax debt, “it does play a role in determining whether the amount of a tax debt is subject to ready determination and thus liquidated.”); In re Huelbig, 299 B.R. 721 (Bankr. D.R.I. Oct. 1, 2003) (Votolato) (Rejecting Ho v. Dowell (In re Ho), 274 B.R. 867 (B.A.P. 9th Cir. Mar. 13, 2002) (Perris, Brandt, Klein), insurance fraud debt is liquidated notwithstanding that the debtors vigorously dispute liability because amount of claim can be calculated using simple arithmetic based on checks attached to a proof of claim.).


17  See § 15.1  What Is Noncontingent Debt?. See, e.g., In re Hatzenbuehler, 282 B.R. 828, 832, 835 (Bankr. N.D. Tex. Aug. 26, 2002) (Lynn) (Disputing liability ordinarily would not exclude a debt from § 109(e) calculation; however, because a condition precedent to the debtors’ liability on a guaranty of corporate debt was unfulfilled at the petition, the disputed debt is not counted. “[A] debt denominated as disputed should be included in the section 109(e) eligibility analysis if, on its face, it is a legally enforceable debt on the petition date. . . . [W]here a dispute requires a creditor to establish the debtor’s liability, the debt should not count for section 109(e) purposes. . . . In this case, the Debtors are liable to the Bank, if at all, through their undertakings in the Guaranties to pay certain of Cherco’s obligations to the Bank. Examination of the Guaranties leads to the conclusion that Debtors had a legally enforceable obligation to the Bank for whatever amount Cherco owed to the Bank . . . . For purposes of section 109(e), the relevant inquiry is how much Cherco owed to the Bank on the Petition Date. A dispute by Debtors of this liability would not ordinarily exclude it from the section 109(e) eligibility analysis.” Because the debtors’ obligation to the bank under the guaranty arose “only upon the Bank’s exercise of its option to require Cherco to repurchase accounts receivable” and since there was no “evidence showing that the Bank exercised its put prior to the Petition Date,” the guaranty was contingent and not counted.).


18  See § 16.1  What Is a Liquidated Debt?.


19  See, e.g., Nicholes v. Johnny Appleseed of Wash. (In re Nicholes), 184 B.R. 82, 89–91 (B.A.P. 9th Cir. June 23, 1995) (Russell, Meyers, Jones) (“Debts which are merely disputed are presumably included in the § 109(e) limitation calculation. . . . However, the term ‘disputed’ is broad and can encompass either liquidated or unliquidated debts. It can also involve the liability for a claim, the amount of a claim, or both. . . . [C]ourts are divided over whether a debt is unliquidated when there is a dispute as to liability or amount. . . . The issue boils down to whether a dispute over liability or amount precludes the ready determination of a debt. . . . [I]t is the nature of the dispute, and not the existence of the dispute, that makes a claim unliquidated. . . . [S]ome disputed claims cannot be readily determined because they require additional processing by the court. . . . [W]e hold that the fact that a claim is disputed does not per se exclude the claim from the eligibility calculation under § 109(e), since a disputed claim is not necessarily unliquidated. So long as a debt is subject to ready determination and precision in computation of the amount due, then it is considered liquidated and included for eligibility purposes under § 109(e), regardless of any dispute. On the other hand, if the dispute itself makes the claim difficult to ascertain or prevents the ready determination of the amount due, the debt is unliquidated and excluded from the § 109(e) computation.”); United States v. May, 211 B.R. 991, 996–97 (M.D. Fla. Aug. 21, 1997) (Sharp) (Disputed tax claim that is in litigation in the Tax Court is unliquidated notwithstanding that IRS filed proof of claim for $803,401.76. “While not every dispute by a debtor will cause the claim to become unliquidated, the court finds such a result justified in the instant case. . . . The appellees disputed the IRS’s claim and argued that several Tax Court cases involving similar interest deducting tax shelter programs resulted in a verdict in favor of the debtors in which they owed $0 to the government. . . . As a result, the court finds that the appellees’ disputed debt was not certain as to amount or liability and thus . . . it was not liquidated for § 109(e) purposes.”); In re Hutchens, 69 B.R. 806 (Bankr. E.D. Tenn. Jan. 20, 1987) (Stair); In re Burgat, 68 B.R. 408 (Bankr. D. Colo. Dec. 30, 1986) (Matheson); In re Lambert, 43 B.R. 913 (Bankr. D. Utah Oct. 22, 1984) (Clark).