What Does Bad Debt Recovery Mean?
A debt from a loan, credit line or accounts receivable that is recovered either in whole or in part after it has been written off or classified as a bad debt. Because it generally generates a loss when it is written off, a bad debt recovery usually produces income. In accounting, the bad debt recovery would credit the “allowance for bad debts” or “bad debt reserve” categories, and reduce the “accounts receivable” category in the books.
