If you don't make every payment in whole when it is due, and you haven't managed to renegotiate with your creditors, then you've defaulted. It doesn't mean that

If you don't make every payment in whole when it is due, and you haven't managed to renegotiate with your creditors, then you've defaulted. It doesn't mean that the debts are worthless, but it does mean that their value is up in the air.