Define: Bad Debt

UK Accounting Glossary

Definition: Bad Debt

Quick Summary of Bad Debt

It is known that a credit customer (debtor) is unable to pay the amount due.

What is the dictionary definition of Bad Debt?

Dictionary Definition

  1. a debt that cannot be recovered.

Bad debt is a loss that a company incurs when credit that has been extended to customers becomes worthless, either because the debtor is bankrupt, has financial problems or because it can’t be collected.


Full Definition of Bad Debt


Examples of Bad Debt in a sentence

Bad debt has significantly and negatively impacted the bank’s profits this year.

The Auditors concluded that the volume of bad debt was wholly unacceptable and could be financially disastrous.

There is good debt and then there is bad debt.

The agency is excellent at recovering bad debt.

The company has had to allow for a £3 million provision for bad debt.

If they had acted more cautiously in the first instance; the banks would have had less bad debt to declare.

It only has a few subsidiaries to shunt bad debt into.

Profits in 1994 were bolstered by a significant fall in bad debt provisions to £372 million.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Bad Debt. Payroll & Accounting Heaven Ltd. November 17, 2019
Chicago Manual of Style (CMS):
Bad Debt. Payroll & Accounting Heaven Ltd. (accessed: November 17, 2019).
American Psychological Association (APA):
Bad Debt. Retrieved November 17, 2019, from website:

Definition Sources

Definitions for Bad Debt are sourced/syndicated from:

This glossary post was last updated: 23rd December 2018.