Bad debt
A debt is a sum of money that is owed by or due from a debtor to a creditor. A bad debt is a debt which a creditor realises will never be repaid, and which the creditor is not willing to embark on legal processes to retrieve. The loan is typically ‘written off’ ie, it is assumed lost forever, never to be received.
Such a state of affairs may occur, for example, when the debtor is a company that has gone, or is about to go, into liquidation, or a heavily-indebted individual passes away. The term ‘insolvency' describes the inability of a debtor to pay its debts. In the United Kingdom, insolvent individuals are made 'bankrupt', while companies are put into 'liquidation' or 'administration'.
The precise definition of what constitutes a bad debt will depend on the country in which it exists.
NB Cash flow is an issue for the construction supply chain, and is a common reason for contractors and sub-contractors becoming insolvent. This can be catastrophic for a project in terms of time and money. For more information see: Cash flow.
[edit] Related articles on Designing Buildings
Featured articles and news
Review and comment on the revised draft before July 11.
We are indeed now 10 years old, so go on and be bold !
Write about something you know, help us build and grow !
IHBC's 25th anniversary 2022 Aberdeen School.
A blended event and triumphant return.
New Construction Leadership Council Co-Chair selected.
Mark Reynolds succeeds Andy Mitchell as Co-Chair of CLC
Designing Buildings is 10 years old.
Types of work to existing buildings.
From alteration to deconstruction on DB.
Publication available
BSRIA Conference 2022, June 23.
Refurbishment for Net Zero.
In the sunshine things get hotter.
Understanding temperature in buildings on DB.
Giving power to the consumer on the road to net-zero.
A call for home energy management to be modernised.
How many different types can you think of ?
50th anniversary of the first Pride parade UK.
Looking back and fourth to what still needs to be done.
Cleaning up air quality and the Environment Act 2021.
Targets, impacts and action from ECA member.
Balkrishna Doshi wins Royal Gold Medal 2022.
Pioneering Indian environmental design Architect.
The greenest building is the one already built.
History of Temple Meads rewritten.
UK crying out for female tradespeople says CIOB research.
Currently standing at just 1%.
Find out more with BSRIA.
A cricket pitch is 1 chain long whilst 80 chains is a mile.
What is your pledge ?
Cabman shelters.
Changes come into force for F,L,O and S.
CIAT member reasons on why it matters.
Are there still ‘lessons to learn’ from Grenfell ?
Nine in ten civil engineers think so.
IHBC Annual School, 15-18 June.
The Jubilee® worm drive hose clip or Jubilee clip.
A trusted clip with a long history, worth celebrating.
The new wave of green architectural features in context.
CIAT report on new route to CSCS cards
For built environment professionals.