Yes, with some limitation.
This is not a casualty loss, it is non-business bad debt. This is deductible as a capital loss on schedule D. See these links to start.
https://www.irs.gov/taxtopics/tc453
https://turbotax.intuit.com/tax-tips/irs-tax-return/how-to-report-non-business-bad-debt-on-a-tax-ret...
The first point is that the debt amount must be final and uncollectible, and you must make every reasonable step to collect. If the contractor is in bankruptcy, you must contact the court to be listed as a creditor. You can't deduct any loss if there is a possibility of collecting. This might mean that you can't deduct the loss until the bankruptcy case is closed. For example, if the case does not close until 2026 and you recover $5000, you could deduct the remaining $51,000 on your 2026 tax return. If audited, you must be able to show the IRS how you determined that the debt was uncollectible and the date it became uncollectible.
Then, this is a capital loss on schedule D. It can offset other capital gains, such as from sale of stocks. If you don't have capital gains to offset, you can deduct $3000 in the first year, and the rest carries forward, and can be used to offset future capital gains or be deducted at $3000 per year until it is used up.
