Originally Posted by
unhuman
No, it would be a capital loss.
The way Bad Debts work is that it is to offset income that has already been recorded but will not be received.
i.e. if you are a business and make a sale on credit, income is recorded. However if that credit goes bad and the income will never be received then you offset the income with the Bad Debt expense, thus the overall effect is nil.
With Harmoney, the loan payments are capital repayments, not income. Thus any payments not made are capital losses and not Bad Debt expenses.