What is Bad Debt?

Legal Definition
A bad debt is an amount owed to a creditor that is unlikely to be paid and which the creditor is not willing to take action to collect because of various reasons, for example due to a company going into liquidation or insolvency. There are various technical definitions of what constitutes a bad debt, depending on accounting conventions, regulatory treatment and the institution provisioning. In the USA, bank loans with more than ninety days' arrears become "problem loans". Accounting sources advise that the full amount of a bad debt be written off to the profit and loss account or a provision for bad debts as soon as it is foreseen.
-- Wikipedia
Legal Definition
Generally speaking, one which is uncollectible. But technically, by statute in some states, the word may have a more precise meaning. In Louisiana, bad debts are those which have been prescribed against (barred by limitations) and those due by bankrupts who bave uot surrendered any property to be divided among their creditors. Civ. Code La. 1900, art. 1048. In North Dakota, as applied to the management of banking associations, the term means all debts due to the association on which the interest is past due and unpaid for a period of six months, unless the same are well secured and in process of collection. Rev. Codes N. D. 1899, ยง 3240
-- Black's Law Dictionary