Bad debts may refer to a condition where a company cannot collect the amount of money which is owed to them by a different party. Bad debts may affect a company in a really negative manner. In such cases, bad debt is not recoverable and it should be written-off by the accountant of the company. So, how do you define bad debts?
What is bad debt? How can you define it?
- Thread starter good-guy
- Start date
Yeah, government and banks are always in the business of writing off bad debts and bailouts, but what about on the individual level, what is a bad debt, I think bad debt is any kind of debt that is not useful to you in the current situation you're in for example, let's say you're struggling financially and you bought a car on credit.
This is an example of bad debt at a individual level, because now you're stuck and you will have to pay it back and at your situation you have no business purchasing a car if it doesn't contribute to your finances.
This is an example of bad debt at a individual level, because now you're stuck and you will have to pay it back and at your situation you have no business purchasing a car if it doesn't contribute to your finances.