Debt is a promise to pay. Debt default is the dissolution of that promise. The borrower — a government, a corporation, an individual — announces that they cannot, or will not, make the scheduled payments. The promise dissolves. The creditor is left with a claim that cannot be collected.
Sovereign default — default by a national government — is the most consequential form. Unlike a corporation, a government cannot be liquidated. Its assets cannot be seized. Its territory cannot be repossessed. The creditors have no remedy except negotiation. The dissolution of the debt is a political act as much as a financial one.
Argentina defaulted in 2001 on approximately $100 billion in sovereign debt, the largest default in history at the time. Greece effectively defaulted in 2012, though the term was avoided — the debt was "restructured," which meant that creditors accepted a loss of approximately 75% of the face value. Both countries experienced severe economic contractions, political upheaval, and years of restricted access to international capital markets.
Sovereign default is dissolution without extinction. The government continues to exist. It continues to spend, to borrow (from domestic sources if not international ones), to govern. But its relationship with creditors is permanently altered. Future borrowing will be more expensive, more restricted, or simply unavailable. The dissolution of a promise poisons future promises. Trust, once dissolved, is not easily reconstituted.