Bad Debt

A Bad debt is all the credit that has a high risk because the debtor has failed or is facing problems in meeting obligations. Bad debt can be defined as a State of credit where the debtor is not able to pay part or all of its obligations to the bank as it has been exchanged or there has been an indication that some potential or the entirety of the obligations of the debtor would not be capable of being repaid.

Bad debt is primarily caused by the failure of the debtor party fulfills its obligations to pay the installments (installments) principal credit along with the agreed interest on both sides in the agreement of credit. The sense of the above can be summed up as follows:

1. Failure of credit installment payment agreement fulfillment.
2. The payment delay occurs without obvious reasons.
3. There is a possibility of loss that exceeds the limits of tolerance of the lender/bank.
4. Necessary legal action to reclaim a bill credit.

                         
An indication of the occurrence of potential bad debt are as follows:

1. The occurrence of the delay in payment of principal or interest and credit.
2. Don't pay off at all.
3. Necessary negotiations again over the terms of payment of the credit and interest rate stated in the credit agreement.

Any credit given to bank of the debtor contains the risk of failure. Therefore to monitoring every bank requiring gauge smoothness/health credit to minimize the risk of jamming and early appropriate action in an attempt to prevent the worsening of problem a loan which leads to harm the bank. Measuring instrument which is currently used, namely a credit collectible.

Conductibility is a picture of the State of the principal debt and the payment of installments and interest loans as well as the rate of return of funds Word Wrap infused in securities or more planting. It can be seen in the following table:

The accuracy of the payment of principal and interest.

Conductibility	The accuracy of the payment of principal and interest
Smoothly	Payments on time, the development of good account and no arrears as well as in accordance with the terms of the credit.
In particular attention	There are arrears of payment of principal and interest or up to 90 days.
Less smoothly	There are arrears of payment of principal and interest or have exceeded 90 days up to 120 days.
It is doubtful	There are arrears of payment of principal and interest or have exceeded 120 days up to 180 days.
Bogged down	There are arrears of payment of principal and interest or has exceeded 180 days.