> For the complete documentation index, see [llms.txt](https://docs.qiro.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.qiro.fi/qiro-marketplace-product-guide/for-investors/in-case-of-default.md). # In case of default Whenever asset originator misses the repayment and even after the grace period (depending on the loans) there is no repayments it is detected as default. There would be on-chain and off-chain process to handle this default event.\ \ **On-chain process**\ \ Junior pool takes the loss :- while structuring the deal the junior tranche assumes the first loss. so based on the buffer if it's under the junior pool size, it would be taken completely by junior pool investors. \ \ As an effect, the size of junior pool buffer and interest rate will reduce depending on the size of default. Senior pool will stay unaffected until the buffer is in place. If the buffer is breached and junior pool goes to $0, then senior pool will start losing the rewards and principal depending on default amount. \ **Off-chain process** During the grace period as well as whenever a default is detected, investors communicate with the asset originator to identify the conditions leading to the default, remediate and agree to a repayment plan, and establish transparent solutions to move forward with future repayments. In case of unsuccessful remediation process, Lenders can pursue off-chain legal recourse via excess interest spread, over-collateralisation and assets custody provided by the Asset Originators to recoup losses. All pools on Qiro are fully over-collateralised with off-chain assets. \ \ After such actions or liquidations the proceeds will be paid to tranche token holders based on the tranche they are invested in. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.qiro.fi/qiro-marketplace-product-guide/for-investors/in-case-of-default.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.