Bad Debt

Bad Debt means:
a debt that is not collectible and is therefore worthless to the creditor. A debt may become uncollectible because the debtor is insolvent. A business bad debt may be written off under the specific charge-off method. A personal bad debt is normally not deductible and, if allowed deductible by the U.S. Internal Revenue Service, would be treated as a short-term capital loss, which is limited to $3,000 per year. Former IRC (check if this IRC provision is current here) §166.