bad debt

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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 ?
In distinguishing business and non-business bad debts, the question that must be asked is: Does the loss bear a "proximate" relation to the taxpayer's trade or business?
Global Banking News-December 9, 2015--Indian banks might not meet bad debt clean up target in 2016
Four years ago, bad debts portfolio represented 30 per cent of the total credit portfolio, which the bank successfully reduced to 5 per cent during the previous fiscal year that ended in 30 June 2012.
The combined bad debts of universal and commercial banks amounted to P69.
Lloyds said it saw a significant slowdown in the level of bad debt charges as improving economic conditions help borrowers on to a firmer footing.
Banks have been hit by rising bad debt since last year as more and more people renege on repayments on loans and credit cards, the price comparison website said.
The company's UK chief executive, Dyfrig John, said the bank had kept its bad debt levels flat despite a sharp increase in personal insolvencies.
The cash set aside to cover bad debts and extra investment in the business wiped out strong growth in Barclaycard's UK and overseas revenues.
Much of the pounds 1billion figure came from Barclay-card, where charges on bad debts rose by more than a third to pounds 696million.
A council spokesman said: "The bad debt provision is the amount of money the council sets aside to cover potential bad debts.
Yes, the banks' bad debts need to be addressed, Malmgren says.