law: Co-Operative Societies Act 2008 
  27.
  
  Bad and doubtful loans
  1.      When the whole or
  
  part of a loan made by a credit union remains unpaid for a period of 12 months
  
  after the date fixed for repayment in full of monies loaned and no payment on
  
  account of principal has been made after the date, the amount of the principal
  
  remaining unpaid, shall be charged to and paid from the reserve for doubtful
  
  accounts fund less than any money standing to the credit of the borrower on the
  
  books of the credit union in a share or deposit account and less the market
  
  value of any security held by the credit union in respect of the loan. The
  
  society may, with the Registrar’s approval, reduce the period of 12 months.
  2.      Any monies
  
  subsequently recovered with respect to such loans shall be taken into income.
  3.      All interest which
  
  has been collected thereon during the current year shall be deducted from the
  
  outstanding loan interest, if not already done so, before the write off is
  
  made.
  4.      With the approval of
  
  the Board, any collection fees or commissions, or legal charges incurred in the
  
  collection of the loan may be added to the loan before the write off is made.