# Liquidation

### Liquidation rules 

* The bond will be liquidated when its LTV reaches 80%. 

LTV = (Total sold unit \* Issue Price\*100) / Collateral \* Collateral TWAP price 

*For example: You sell 1000 bond units at the issue price = 0.65 BUSD and mortgage 10000 POSI at the rate POSI/BUSD=0.1*\
*LTV = (1000\*0.65\*100)/(10000\*0.1)=65%*

* The bond will be liquidated if the issuers do not repay before the maturity date. 

### The effects of liquidation 

* When a bond is liquidated or matured, users can no longer trade it on [Bond Exchange](https://position.exchange/trade/). 
* The system will distribute the issuer’s collateral to the holder as a percentage of holding.