Unforgiveable doesn't mean it'll be paid back. If someone goes bankrupt and can't forgive a loan, it's more likely that they'll continue to miss interest payments while also never paying back the principal, which just keeps building up. Typically loans line that get written off internally as a loss, or sold at a loss to a debt collector, even if the loan isn't forgiven to the borrower, it'll be a loss and therefore a risk event for the lender.