Made personal unsecured loan to friend. Friend filed bankruptcy. Got 25% thru court pmts. Still owed 60% of original. Last court pmt was 12/2016. Can I deduct?

[Al]

I took out a bank loan to loan the money.  Can I also deduct the interest I have paid on the loan?  Court payments only covered principle.

[CherylW]

This, from IRS Publication 453:

Nonbusiness Bad Debts - All other bad debts are nonbusiness. Nonbusiness bad debts must be totally worthless to be deductible. You can't deduct a partially worthless nonbusiness bad debt.

A debt becomes worthless when the surrounding facts and circumstances indicate there's no reasonable expectation of payment. To show that a debt is worthless, you must establish that you've taken reasonable steps to collect the debt. It's not necessary to go to court if you can show that a judgment from the court would be uncollectible. You may take the deduction only in the year the debt becomes worthless. You don't have to wait until a debt is due to determine that it's worthless.

Report a nonbusiness bad debt as a short-term capital loss on Form 8949 (PDF), Sales and Other Dispositions of Capital Assets, Part 1, line 1. Enter the name of the debtor and "bad debt statement attached" in column (a). Enter your basis in the bad debt in column (e) and enter zero in column (d). Use a separate line for each bad debt. It's subject to the capital loss limitations. A nonbusiness bad debt deduction requires a separate detailed statement attached to your return.

[Al]

The balance left after all of the bankruptcy payments to me is $19,000.  From what I can see from other answers, I can only claim $3000 per year.  Is that correct and if so, does that mean that next year, I can claim another $3000, and another after that and so on?  It says it can only be written off in the year it because non-payable.

[CherylW]

Yes, that is correct, it can only be written off in the year it becomes non-collectible.  By filling out an 8949, though, it now becomes a capital loss, which has the capital loss rules applied to it.  
Here is the guidance from IRS Tax Topic 409, Capital Gains and Losses:
If your capital losses exceed your capital gains, the amount of the excess loss that you can claim on line 13 of Form 1040 to lower your income is the lesser of $3,000, ($1,500 if married filing separately) or your total net loss shown on line 16 of the  Form 1040, Schedule D (PDF). If your net capital loss is more than this limit, you can carry the loss forward to later years. You may use the Capital Loss Carryover Worksheet found in Publication 550, Investment Income and Expenses, or in the  Form 1040, Schedule D Instructions, to figure the amount you can carry forward.