bad debt


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Related to bad debt: Bad Debt Expense, Bad Debt Recovery

bad debt

n. an uncollectible debt. The problem is to determine when a debt is realistically dead, which means there must be some evidence of uncollectibility or a lengthy passage of time. Discharge in bankruptcy, the running of the statute of limitations to bring a lawsuit, disappearance of the debtor, a pattern of avoiding debts or the destruction of the collateral security can all make a debt "bad." For income tax deduction purposes such a debt in business is deductible against ordinary income (found in Schedule C) and such a personal debt is deductible against short-term capital gains. A debt due for services rendered is not a bad debt for tax purposes, since there is just no income on which to be taxed.

bad debt

noun dishonored bill, inconvertible bill, irreeeemable bill, irretrievable debt, loss, outstanding debt, protested bill, uncollectible debt, write-off
Associated concepts: bad debt loss, bad debt tax deduction
See also: nonpayment
References in periodicals archive ?
A tool provided by India's central bank to help lenders tackle bad debts can be used to hide bad debts.
VAMC is anticipated to purchase bad debt in a quicker pace after it and inspectors of the central bank have met representatives of banks to classify debt and intends to sell debt every month.
Chief executive Gerry Mallon said: "The amount of bad debt provision has decreased massively.
For consumers who have more bad debt than they can handle, certified credit counselors are available at MMI to help develop a plan to pay off the debt and avoid future bad debt.
3bn losses reported for 2009 after the HBOS takeover and financial crisis left Lloyds with a colossal pounds 24bn in bad debts.
Bad debt protection acts as a safeguard against unpaid invoices.
com, said: "Credit card companies have been badly burnt with bad debts.
48bn yesterday but counted the costs of increased bad debts in its US mortgages operation.
In contrast, by mechanically adjusting book income for the $2 million increase in the allowance for bad debts account, ABC could not claim any portion of the $800,000 deduction until a write-off entry is recorded for financial accounting purposes.
Resources spokesman Coun Peter Allen said: "The council takes the issue of bad debt very seriously.