A debt is written off by a creditor when they carry out an accounting operation that eliminates this debt from the accounts receivable. It means that the creditor considers the debt as lost and the corresponding sale will also be removed from their profits.
However, this does not mean that the debt no longer exists, as the debtor still owes the amount in question. If the debt was unjustified in the first place, a credit note must be drawn up.
When it comes to debt recovery, the write-off of a debt has no established significance. Some consider it the signal for a payment plan, i.e. repayment via regular fixed instalments.
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