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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.
Good debt is preferable because it builds value, but there are cases where bad debt is the best choice. For instance, using a loan to buy a reliable car to get you to and from work is a good use ...
Debt is part of the American way of life. Although credit card debt levels actually fell by $76 billion in Q2 2021 -- the biggest quarterly drop in history -- overall debt levels continued to rise ...
The word "debt" has all kinds of negative connotations -- and with good reason. Carrying a heavy debt load not only jeopardizes your financial security, but it can also lead to everything from ...
Probability of default (PD) is a financial term describing the likelihood of a default over a particular time horizon. It provides an estimate of the likelihood that a borrower will be unable to meet its debt obligations. [1] [2] PD is used in a variety of credit analyses and risk management frameworks.
The credit cycle is the expansion and contraction of access to credit over time. [1] Some economists, including Barry Eichengreen, Hyman Minsky, and other Post-Keynesian economists, and members of the Austrian school, regard credit cycles as the fundamental process driving the business cycle.
Mortgages are considered good debt because not only does a home provide shelter but its value tends to appreciate over time. Same with student loan debt, as it can be considered an investment in ...
In economics, consumer debt is the amount owed by consumers (as opposed to amounts owed by businesses or governments). It includes debts incurred on purchase of goods that are consumable and/or do not appreciate. In macroeconomic terms, it is debt which is used to fund consumption rather than investment. [1]