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How to handle disputed debts

A disputed debt is a bona fide disagreement between the creditor and the committee as to the existence of a debt or the amount owed by the committee. If the creditor provided something of value, notwithstanding the dispute, then the committee must disclose:

  • The amount the committee admits it owes,
  • The amount the creditor claims is owed, and
  • Any amounts the committee has paid the creditor.

The committee may also note on the report that disclosure of a disputed debt is not an admission of liability or a waiver of any claims against the creditor. Once a dispute is resolved, the committee should report the correct amount on the next report, along with a statement explaining that the dispute was resolved.