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Deductions & credits
No, you would not be able to classify this as a non-business bad debt because these generally apply to personal loans or debts that individual lend to others, which become uncollectible. In this case, you didn't lend anything but instead, entered into a contract which is not a debt instrument.
Since, you entered into a contract, you experienced is a breach of contract. Since the contractor claimed bankruptcy, you may not have grounds for legal action but you may wish to consult with a legal professional to discuss possible remedies.
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March 5, 2025
7:35 AM