I would agree that yo have a non-business bad debt. sadly, it's a short-term capital loss. net capital losses are limited to a deduction of $3,000 per year. ($1,500 if Married filing separate)
there are some things you should do to preserve the write off in case the IRS questions it. do this even though any collection would be fruitless.
make a formal demand for repayment - i would send it registered mail. this way if they don't get it you have the envelope and letter inside to prove you made an attempt to collect
