What does credit card bad debt write-off mean? The consequences of non-repayment are serious

If the credit card is overdue for too long, the bank will set the credit card status as bad debt. If it is determined that the money cannot be repaid, the credit card may be written off as bad debt. Many friends don’t know what the write-off of credit card bad debts means and what the difference is from credit card bad debts. Let’s take a look.

1. What does it mean to write off credit card bad debts?

Credit card bad debt refers to the status of a credit card. Generally, a credit card is overdue for more than 3 months, and the bank has called for payment more than 6 times. If the cardholder is unable to repay, the uncollectible debt will be The credit card for the payment is set to bad debt status.

The write-off of credit card bad debts can be seen as a way for banks to deal with non-performing loans, that is, write off domestic accounts and leave external accounts. Banks will treat arrears that cannot be recovered for a long time as non-performing assets, and then digest them internally, that is, use deposit reserves to pay off the arrears, but the arrears will still be recorded in the cardholder's account. After all, this The money is not paid back by the cardholder himself.

2. Do I still need to repay the credit card after writing off bad debts?

Some cardholders said that after the bad debts of their credit cards were written off, the bank customer service said they did not need to pay them back. This situation is also possible.

But everyone needs to think carefully. Just because bad debts on credit cards are written off does not mean that bad credit can be eliminated. Therefore, if you want to restore your credit, even if bad debts are written off, it is best to still repay them. After paying off the debt, you can negotiate with the bank to delete the bad debt. If the bank agrees to delete it, it will apply to the Central Bank's Credit Reference Center to modify the credit report. The modified bad debt will become overdue.

In this way, the bad debt record is officially terminated, but the bad credit record will not be officially eliminated until it is retained for 5 years from the date of termination of the bad debt.

What does bad debt write-off mean?

1. Text answer

Bad debt write-off means that commercial banks and joint-stock commercial banks generally implement the Level 4 loan classification system. This is a classification method that serves fiscal and taxation policies under the planned economy system. The write-off of bad debts no longer requires approval from the fiscal authorities. The write-off of bad debts does not mean giving up the creditor's rights. The creditor's rights that have not yet been terminated must continue to be recovered. Only the general allowance for doubtful debts is required. Ordinary bad debt provisions are only related to the total loan amount and cannot reflect the true degree of loss on the loan.

2. Analysis

If the user fails to repay the loan at the bank in time, penalty interest will be incurred after the loan is overdue. The longer the time, the more the penalty interest will be. Moreover, banks will collect money after it is overdue. A common method of collection is to call the borrower's phone number and wait until the user returns the money. If the loan processed is overdue and returned, the overdue record will be uploaded to the credit reporting center, causing the personal credit report to become bad. After the credit report becomes bad, it will affect the processing of various loans, such as car loans or housing loans, and the debt will not be paid back until the loan is repaid. After that, it will continue to be saved on the credit report for 5 years, and it will automatically disappear after 5 years.

3. Do I still need to repay the bad debts after writing them off?

Credit card bad debt write-off can be regarded as a way for banks to deal with non-performing loans, that is, write off domestic accounts and leave external accounts. Arrears that cannot be recovered for a long time are regarded as non-performing assets. The bank will digest them internally, that is, use deposit reserves to repay the arrears, but the arrears will still be credited to the cardholder's account. After all, the money is not returned by the cardholder himself.

How to deal with bad debts on ICBC’s credit cards?

It is recommended to go to the card issuer’s branch with your card and valid ID for processing. If you have any outstanding balance, you can check the repayment at the card issuer’s website. If the bad debt is caused by overdue debt, you must pay off all the debt as soon as possible, and then contact the bank to let the bank handle the bad debt status. After the bank processes it, the credit card will show an overdue record and will keep it for 5 years. If it is a bad debt caused by overpayment on a credit card, you can just withdraw the money directly. Finally, contact the bank and let the bank handle it in time. The bank will report to the central bank for credit reporting, and your credit card status will show normal only after the credit reporting is updated.

①What are bad debts?

Bad debt is a term in the economic field, which refers to receivables that have passed the payment deadline, cannot be recovered after collection, are in a sluggish state for a long time, and may become bad debts. Bad debts are the result of failure to settle accounts in a timely manner and also refer to property that cannot be recovered because the other party does not repay it.

②Methods to eliminate bad debts:

If bad debts arise due to annual fees or premium payments, it is generally easier to deal with. You can directly contact the bank for consultation or negotiation, especially if it is not If you are aware of the annual fee payment problem, you can ask the bank to immediately write off the bad debt records in the credit report. The amount of bad debts in this case is generally relatively small and can be repaid according to the bank's requirements. However, there are two things you need to pay attention to during the negotiation: First, even if the bank agrees to eliminate bad debts, it will not take effect immediately. It will take a week at the earliest and one to two months at the longest before the credit report shows it. The second is that although the credit reporting system is managed by the People's Bank of China, you do not need to negotiate with the People's Bank of China when a bad debt occurs. You can just negotiate with the corresponding bank. For example, if there is a premium on a CCB credit card, you must go to CCB to handle it.

If you want to eliminate the bad debt caused by arrears, you must pay off the loan. This is the premise. Some people always think that the credit report will be automatically eliminated after five years, and five years is the period from the arrears. It is calculated from the date of repayment or the termination of the bad behavior. If the bad behavior continues, the bad debt will always be there, and there is no such thing as five years. However, it should be noted that after paying off the debt, you must remind the bank to report to the credit reference center to write off the bad debt records in advance.

③Is the bad debtor a bad debtor?

Bad debts do not necessarily belong to laolai. First of all, we must clarify the definition of laolai. It refers to those who are obviously capable of repaying but do not repay and maliciously default. Such people will be included in the list of dishonest executors by the state. . After being included in the list of dishonest executors, you will be restricted from high consumption. In the future, you can only take ordinary high-speed rail seats and trains when traveling, but you will not be able to take high-speed rail second-class seats and airplanes. Moreover, the children of Laolai will also be restricted from studying in some high-end schools. Bad debts indicate that the amount has not been repaid, and the borrower may have forgotten it. At this time, the bank should fulfill its obligation to remind the borrower to repay it quickly.

How to eliminate bad credit card debt?

Bank of China can only check the usage of Bank of China credit cards in your name. It is recommended that you maintain good card usage habits and repay debts on time in the future. Your personal credit record will be improved along with your good card usage record. It is constantly refreshed and improved. If you need to know your credit record, it is recommended that you go to the Credit Information Management Department of the People's Bank of China with your ID card to apply for inquiry, or log in to the website of the Credit Information Center of the People's Bank of China for inquiry.

The above content is for your reference, please refer to actual business regulations.

Bad debt write-off management measures

Bad debt write-off is a classification method that serves fiscal and taxation policies under the planned economy system. The standard for defining non-performing assets is the term: loan principal and interest are in arrears for more than 180 days The above are "overdue", loan interest arrears that are three years overdue are "sluggish", and those where the lender has fled or have been approved by the State Council are "bad debts". The write-off of bad debts no longer requires the approval of the fiscal authorities. The write-off of bad debts does not mean the abandonment of creditor's rights. The creditor's rights that have not yet been terminated must continue to be recovered. Only ordinary doubtful debt reserves are required (1% of the total loan amount). General bad debt provisions are only related to the total loan amount and cannot reflect the true extent of loan losses.

1. Declaration of bad debt write-off accounting treatment

Bad debts incurred by banks must provide conclusive evidence. If they meet the prescribed conditions after review, they should be reported at any time, reviewed and approved at any time, and withdrawn from the accrual in a timely manner. written off in the provision for bad debts. Banks are not allowed to conceal, fail to report, have outstanding debts for a long time, or cover up non-performing assets. The write-off of bad debts must follow the principles of strict identification conditions, providing conclusive evidence, strictly pursuing responsibilities, reporting, review and approval step by step, keeping confidentiality to the outside world, and keeping the write-off case.

When a bank declares to write off bad debts, it must provide the following materials:

1. Borrower or invested enterprise information, including bad debt write-off declaration form (produced and filled in by the bank) and review and approval materials , detailed materials of creditor's rights and equity, borrower (cardholder), guarantor and guarantee method, basic situation and current situation of the invested enterprise, property liquidation situation, etc.;

2. The handling bank (company ) investigation report, including the reasons for the formation of bad debts, the remedial measures taken and their results, the specific collection process and its proof for the borrower (cardholder) and guarantor, the disposal of collateral (pledge), and the write-off Reasons, creditor's rights and equity managers, department heads and unit heads, relevant documents for handling the responsible persons, etc.;

3. Other relevant materials.

Bad debts that cannot be proved by conclusive evidence shall not be written off.

2. Approval of the accounting treatment of bad debt write-off

The key points of the review of bad debt write-off mainly include whether the reasons for bad debt write-off are in compliance with the regulations; whether the bank's claims are fully paid; whether the amount of bad debt is accurate; Whether the person responsible for the loan has been identified and investigated.

Bad debts incurred by banks will be reported to each level and then approved and written off by the bank’s head office (head office). For small bad debts, the first-level branches (branch offices) can be authorized to review and approve them, and report them to the head office (head office) for filing. The specific authorization limit of the head office (head office) to the first-level branches (branch companies) is determined based on the internal management level and reported to the competent financial authority for filing. First-level branches are not allowed to sub-authorize branches.

When a bank writes off bad debts, it must strictly carry out review and approval procedures and fill in the bad debt write-off declaration form. When the superior bank (company) receives the declaration form from the lower-level bank (company), it shall organize relevant departments to conduct strict review and sign opinions. Except for the provisions of laws and regulations and the "Bad Debt Write-off Management Measures", no other institution or individual, including debtors, may intervene or participate in the bank's bad debt write-off operations; at the same time, the following claims or equity shall not be written off as bad debts:

1. The borrower or guarantor has the financial ability to repay, but the bank fails to take all possible measures and implement necessary procedures to recover the creditor's rights in accordance with the provisions of these Measures;

2. Violates the provisions of laws and regulations, Bank claims that have been evaded or left vacant in various forms;

3. Bank claims that have been evaded or left vacant due to administrative intervention;

4. Banks have failed to provide borrowers and guarantees claims to be repaid by others;

5. Other bank claims or equity that should not be written off.

Legal basis: "Measures for the Administration of Bad Debt Write-off of Financial Enterprises"

Article 1 is to standardize the management of bad debt write-off of financial enterprises, enhance the risk prevention and control capabilities of financial enterprises, and promote the health of financial enterprises Development, these Measures are formulated in accordance with relevant laws, regulations and the relevant provisions of the "Financial Rules for Financial Enterprises".

Article 2: These Measures apply to financial enterprises established in accordance with the law within the territory of the People's Republic of China, including policy banks and China Development Bank, commercial banks, insurance companies, financial asset management companies, and securities companies. Companies, trust companies, finance companies, financial leasing companies, rural financial institutions and other enterprises that engage in financial business (collectively referred to as financial enterprises).

Companies, financing guarantee companies and other enterprises engaged in financial business shall refer to these measures.

Article 3 The term “bad debts” as mentioned in these Measures refers to debts and equity assets that financial enterprises bear risks and losses and meet the conditions identified in these Measures. The term "write-off" as mentioned in these Measures refers to the accounting treatment method in which financial enterprises will write off the recognized bad debts, offset the accrued asset impairment provisions or directly adjust the profits and losses, and write off the assets off the balance sheet.

That’s it for the introduction of how to write off bad debts on credit cards.