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 -- meaning the debt is clear and undisputed by either party -- the debt is known as a liquidated debt.
If your answer is “Having one card totally paid off,” then throw as much money as you can toward the card with the lowest balance first, says Curtis Arnold, the founder of Card Ratings.com, a credit-card–comparison site.
(Yes, do this even if you need to pay only the minimum on your other cards in the meantime.) If your answer is “Boosting my credit score,” then tackle the card with the highest utilization rate (that’s your balance divided by the card’s limit).
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For example, if you are sued in court for 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.