Definition - What does Contingent Claim mean?
A contingent claim is one that a bankrupt individual does not have as a registered liability at present, although it may become one in the future. Such a situation exists, for example, when a person cosigns for another person's loan. If the cosigner later files for bankruptcy, the cosigned loan will become a contingent claim, even though that particular loan is not in default. Should the cosigner decide to file for bankruptcy, they must list all potential contingent claims in their case.
Justipedia explains Contingent Claim
Declaring a contingent claim during bankruptcy may relieve a person of liability for something for which they would otherwise be responsible for by agreement. If a cosigner files for bankruptcy before any default is made on the cosigned loan in question, and so long as the bankrupt individual listed the contingent claim during the proceedings, then they would no longer be liable for the claim. If the bankruptcy goes through without any mention of the contingent claim, and the cosigned loan is then defaulted on, the bankrupt person would still be liable for the outstanding sum.