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Legally irrecoverable

loan or debt is legally irrecoverable solely if it has not been repaid in full or in part according to the terms of the loan agreement and within the time frame specified in the statute of limitations of the relevant State. A loan or debt is not legally irrecoverable solely because there is no documentation of the loan or debt agreement. The fact that a debtor is unable to repay a loan or debt does not automatically mean the loan or debt is irrecoverable.



The following investments all meet the definition of a loan:

  • debentures,
  • government and semi-government bonds,
  • bank bills
  • commercial bills,
  • non-convertible notes, and
  • capital notes.

Note – a person is not treated as having made a loan merely because:

  • the person has an account with a financial institution, or
  • the person has paid an entry contribution.



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