Yes, you can writeoff a bad debt. Click here to watch a video showing the steps. Here is the outline for the process:

• In the Balance report select the account you want to writeoff.
• From Action Menu click on Balance Offsetting Payment.
• When done, the balance on the account will go to $0.
• However, a Bad Debt Writeoff (or whatever desccription you entered) transaction will show in the Ledger and the Transactions Report.
• If you are able to recover this bad debt later, then simply void the Bad Debt Writeoff transaction in the Ledger.