What is Writing Off Bad Debts?

This is an accounting concept. Ordinarily, debts( promissory notes) owed to you are assets- representing money that you will be able collect at some point, or sell.

Writing off a bad debt means that you consider the debt to be noncollectable -- the person that owes you is never going to pay and so your note is worthless and should be "written off" as an asset. Some tax advantage may be derived from this write off.