Also found in: Dictionary, Thesaurus, Wikipedia.
See: arrears, charge, cloud, debit, debt, due, duty, incumbrance, liability, lien, mortgage, obligation

INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421.
     2. But in order to create an indebtedness, there must be an actual liability at the time, either to pay then or at a future time. If, for example, a person were to enter and become surety for another, who enters into a rule of reference, he does not thereby become a debtor to the opposite party until the rendition of the judgment on the award. 1 Mass. 134. See Creditor; Debt; Debtor.

References in periodicals archive ?
The court rejected this argument, stating the statute's language limits the amount of indebtedness on the home or homes, not the amount of a taxpayer's indebtedness.
Qualified residence interest is interest on acquisition indebtedness or home equity indebtedness with respect to a taxpayer's qualified residence (in this case, there was no question that the residences involved were qualified residences).
Therefore, for example, if a taxpayer incurs a debt secured by his qualified residence and uses a portion of the debt proceeds to refinance an existing acquisition indebtedness and uses the remaining portion of the debt proceeds for purposes other than the substantial improvement of the residence, the portion of the debt used to refinance the acquisition indebtedness will qualify as acquisition indebtedness and the portion of the debt used for other purposes will generally qualify as home equity indebtedness, subject to the $100,000 limitation on home equity indebtedness.
As a result, the note should not be considered to be genuine indebtedness.
The Revenue Reconciliation Act of 1993 made a number of changes relating to the exceptions to the general rule requiring that discharge of indebtedness be included in gross income.
It is retroactive to January 1, 1993, so that it applies to all discharges of indebtedness on or after that date.
The adjustments to basis are made to property held by the debtor at the beginning of the year after the discharge of indebtedness occurs.
The notice only applies to acquisition indebtedness, not substantial improvements or refinance indebtedness (discussed below).
Home-equity indebtedness is indebtedness other than acquisition indebtedness secured by the taxpayer's principal or secondary residence, to the extent the aggregate amount of the debt does not exceed the excess of the fair market value of the residence over the amount of acquisition indebtedness.
While personal interest is nondeductible, qualified residence interest, which includes interest on acquisition indebtedness and home-equity indebtedness, is generally deductible.