US Stem Cell Inc (USRM)

[Dragon Lady]

Why "writing off" debt isn't a good thing??

Cause you just STIFFED/SHAFTED a creditor or someone who put faith in you via a "contract" or similar that YOU were going to pay them something back in the future, either installments and/or a lump sum and typically with interest, that's why.

Just go ahead and default on a mortgage or a car loan (which the finance company/bank will then "write off") and then go to "try" and apply for a new loan or credit or a biz loan or even to rent a place or whatever. See how well you're received and liked and what the interest rate will be- double digits min, if they will even lend to you again for years.

It's actually the creditor that "wrote off" the debt as being "bad". Which means they HAD, PAST TENSE, an ASSET on their "books/ledger" and now have to move it to an expense, a LOSS. Banks, creditors, those who loan- DO NOT like to see "assets" go bad and disappear for any reason. It can make them fail and insolvent if it happens enough times- and thus, they REMEMBER who did it to them previously, and share that info with other creditors/lenders/banks/investors in a thing called a "credit report" or a "statement of financials" or whatever- so the next guy knows if he/she wants to take the risk on maybe getting "stiffed" and not repaid. Of course some will always lend money- even to high risk pools or candidates- but you now have to pay mafia level interest rates plus points/fees, etc- there's no free lunch for having discharged past debts w/o repaying them.

BHRT gets to "discharge" it- meaning it moved from being an expense on that side of the ledger, to they now have to book it as a "gain" (read the exact words in the SEC 8-K release) and it may have tax implications. But the point/concept is the same- the wording of the original post just got it a little backwards as to who "writes off" and who gets the negotiated, magic "debt disappearing/discharged" part.