# Write-off In the unlikely scenario where a borrow position accrues bad debt, anyone can write-off their debt. In this case, all of their remaining debt is forgiven and their remaining collateral is seized. ## Write-off conditions Write-offs are only possible as a last resort for if liquidations fail to repay the full debt of an underwater borrow position. In order for a borrow position to be written-off, the following conditions must both be satisfied: 1. The total value of all collaterals within the position must be lower than the value of outstanding loans based on the oracle price 2. The total value of all collaterals within the position must also be under the $1000 threshold. ## How write-off works If all conditions are satisfied in a borrow position, anyone can trigger a write-off for the position. All remaining loans of the position are permanently removed. The removed loans are registered as a loss and are deducted proportionally from the deposits of pool suppliers. 25% of the remaining collaterals in the position are transferred to the caller of the write-off function as a reward. The remaining 75% of collateral is sent to the Reserve contract where it is added to the backing of GTR tokens. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.grace.loans/borrowers/write-off.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.