Bond default refers to the behavior that the bond issuer cannot fulfill its obligations in accordance with the bond agreement reached in advance. Bond default can be divided into long-term bond default and short-term bond default. Among them, long-term bonds and long-term bond issuers are judged to be in default under the following five circumstances.

1. The bond issuer goes bankrupt or is taken over.

2. The bond issuer cannot fully repay the principal and interest within 90 days after the maturity date of the long-term bond.

3. Debt restructuring of bonds is unfavorable to creditors, that is, creditors' claims suffer certain losses through restructuring, including the reduction and extension of principal and interest.

4. The bond has not expired, but there is sufficient evidence to prove that the performing party cannot fully repay the principal and interest of the bond.

5. The bond issuer repays the principal and interest of the bond with the daily loan when the bond expires.

If the bonds purchased by investors meet these conditions, what if the bonds default? If you encounter a bond default and want to recover the loss, you can recover it through negotiation and litigation.

However, if the default crisis of the invested bonds is only temporary, a grace period can be proposed through negotiation. If you don't want to, bankruptcy litigation and breach of contract litigation can recover losses, but the cost is high. Generally speaking, when a bond defaults, investors can recover losses through negotiation or legal proceedings.