Did God really say I should write off bad loans?
Yes … yes he did.
What God said is this: “If you lend money to one of my people among you who is needy, do not treat it like a business deal; charge no interest.” (Exodus 22:25;) He also said: “At the end of every seven years you must cancel debts.” (Deuteronomy 15:1). Jesus says, “Give to the one who asks you, and do not turn away from the one who wants to borrow from you.” (Matthew 5:42). And, “Love your enemies, do good to them, and lend to them without expecting to get anything back. Then your reward will be great, and you will be children of the Most High, because he is kind to the ungrateful and wicked.” (Luke 6:35)
Obviously, if you lend all your money to those who hate you and get nothing in return you’ll go broke — unless God steps in and blesses you.
The overriding principle is this: if someone ask you for a loan and you feel God calling you to lend them the money, treat the loan as a gift. If they repay, great. If not God will reward you. Either way you come out ahead.