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Liquidating debt definitions


Debt is a term that relates an amount of money that is owed by one party to another. When a fixed dollar amount is known for that debt Liquidating debt definitions meaning the debt is clear and undisputed by either party -- the debt is known as a liquidated debt.

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This differs from an unliquidated debt, in which a dollar amount is unknown. A loan is one of the most common types of liquidated debts. Whether it is a home loan, car loan or student loan, these types of liquidated debts represent an exact dollar amount that must be paid back by the loan's maturity date.

Any interest owed on the amount of the loan is also included in the liquidated debt amount. Another type of liquidated debt is legal judgements.

Liquidating debt definitions

When a fixed dollar amount...

For example, if you are sued in court Liquidating debt definitions monetary damages, the amount of damages owed is liquidated debt, but the debt only becomes liquidated once the jury or judge determines the amount of money owed.

Prior to that determination, your legal obligations are unknown, and the debt is considered unliquidated. Commercial papers are unsecured promissory notes that are issued by corporations. These notes have a fixed maturity that is usually less than a year in length.

The amount due on these money market securities is also a form of liquidated debt, as the amount due is clearly specified in the commercial paper. Liquidated debt can also mean Liquidating debt definitions debt that has been settled or paid up entirely.