Credit events (late payments, bankruptcy, etc.) for junk bonds are much less rare than people think. If there is bankruptcy, usually it is Chapter 11 which all

Credit events (late payments, bankruptcy, etc.) for junk bonds are much less rare than people think. If there is bankruptcy, usually it is Chapter 11 which allows for re-org. > Technically when bonds "go to $0" Extremely unlikely, unless there is massive accounting fraud. Recovery rates are on average about 45-55% (since 1987 according to research by S&P).