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In finance, bad debt, occasionally called uncollectible accounts expense, is a monetary amount owed to a creditor that is unlikely to be paid and for which the creditor is not willing to take action to collect for various reasons, often due to the debtor not having the money to pay, for example due to a company going into liquidation or insolvency.
A charge-off or chargeoff is a declaration by a creditor (usually a credit card account) that an amount of debt is unlikely to be collected. This occurs when a consumer becomes severely delinquent on a debt. Traditionally, creditors make this declaration at the point of six months without payment. A charge-off is a form of write-off.
In business accounting, the term "write-off" is used to refer to an investment (such as a purchase of sellable goods) for which a return on the investment is now impossible or unlikely. The item's potential return is thus canceled and removed from ("written off") the business's balance sheet. Common write-offs in retail include spoiled and ...
It was the world's biggest debt restructuring deal ever done, affecting some €206 billion of Greek government bonds. [75] The debt write-off had a size of €107 billion, and caused the Greek debt level to temporarily fall from roughly €350bn to €240bn in March 2012 (it would subsequently rise again, due to the resulting bank ...
Pre-existing is the important term here, as it indicates that the government needs new financing, i.e. more loans, in order to pay long-standing debt. Government debt is used to pay for things ...
A Company Voluntary Arrangement (CVA) is a legal agreement between the company and its creditors, based on paying a fixed amount lower than the outstanding actual debt. These are normally based on a monthly payment, and at the end of the agreed term the remaining debt is written-off.
The government needs to borrow money to continue paying out what Congress has already approved, but the debt ceiling puts a limit on how much money the U.S. government can borrow to pay its bills.
Because the government spends more money than it collects in tax revenue, lawmakers need to periodically tackle the issue -- a politically difficult task, as many are reluctant to vote for more debt.