Bad Debt Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Bad Debt, written in plain English, along with examples of how it is used.

What is Bad Debt?

(n) Bad Debt is the amount receivable for any services rendered or goods exchanged to a person or entity which has not been paid or otherwise adjusted and the chances of getting that payment was nonexistent. The term is used in income tax provisions wherein the bad debt is treated as an expenses of the business entity