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A debt that is not collectible and therefore worthless to the creditor. This occurs after all attempts are made to collect on the debt. Bad debt is usually a product of the debtor going into bankruptcy or where the additional cost of pursuing the debt is more than the amount the creditor could collect. This debt, once considered to be bad, will be written off by the company as an expense.

A bad debt is money owed to you that you can't collect. Bad debts appear as an expense on the company's income statement, thus reducing net income.

This occurs after all attempts are made to collect the debt. delinquency is often a product of the debtor into bankruptcy or when the additional cost of debt is more than the amount the creditor can charge.