(plural bad debts)
- (business, accounting) A debt which cannot be recovered from the debtor, either because the debtor doesn't have the money to pay or because the debtor cannot be found and/or forced to pay.
bad debt - Investment & Finance Definition
Accounts receivable that are unlikely to be paid. Companies typically write off bad debts, setting up a special reserve account that they then charge. In a recession or tough economic times, the amount of bad debt increases. Companies, as well as small business owners, can write off the bad debt as a business deduction on their income taxes.
bad debt - Legal Definition