This paper examines the events following financial distress for 102 public junk bond issuers. It finds that out-of-court debt relief mainly comes from junk bond holders, while banks rarely forgive principal but often defer payments and waive covenants. Asset sales are important for avoiding bankruptcy but are limited by industry factors. Restructuring bank debt without restructuring public debt or selling assets leads to bankruptcy. The structure of a company's liabilities affects bankruptcy likelihood, with secured debt and complex public debt structures increasing the risk. There is no evidence that more profitable distressed companies are more successful in dealing with distress; they are not less likely to go bankrupt, sell assets, or reduce capital expenditures. Capital expenditures decrease significantly, with 83% of firms reducing them. Banks play a limited role in resolving distress due to the presence of subordinate public debt. Comprehensive debt restructurings are rare, possibly due to the low cost of Chapter 11 or impediments to out-of-court restructurings. Public debt restructurings through exchange offers are crucial for avoiding bankruptcy. Companies that restructure bank debt but not public debt or sell assets go bankrupt. Asset sales are limited by industry factors, and public debt restructurings are more effective in avoiding bankruptcy. Mergers are similar to asset sales but have different incentives. Capital expenditures drop significantly in distressed firms, with no clear evidence of inefficiency. Bankruptcy is costly and inefficient, but companies often file for Chapter 11 despite the possibility of out-of-court restructurings. The paper concludes that financial distress is costly, and bankruptcy is not always the most efficient resolution.This paper examines the events following financial distress for 102 public junk bond issuers. It finds that out-of-court debt relief mainly comes from junk bond holders, while banks rarely forgive principal but often defer payments and waive covenants. Asset sales are important for avoiding bankruptcy but are limited by industry factors. Restructuring bank debt without restructuring public debt or selling assets leads to bankruptcy. The structure of a company's liabilities affects bankruptcy likelihood, with secured debt and complex public debt structures increasing the risk. There is no evidence that more profitable distressed companies are more successful in dealing with distress; they are not less likely to go bankrupt, sell assets, or reduce capital expenditures. Capital expenditures decrease significantly, with 83% of firms reducing them. Banks play a limited role in resolving distress due to the presence of subordinate public debt. Comprehensive debt restructurings are rare, possibly due to the low cost of Chapter 11 or impediments to out-of-court restructurings. Public debt restructurings through exchange offers are crucial for avoiding bankruptcy. Companies that restructure bank debt but not public debt or sell assets go bankrupt. Asset sales are limited by industry factors, and public debt restructurings are more effective in avoiding bankruptcy. Mergers are similar to asset sales but have different incentives. Capital expenditures drop significantly in distressed firms, with no clear evidence of inefficiency. Bankruptcy is costly and inefficient, but companies often file for Chapter 11 despite the possibility of out-of-court restructurings. The paper concludes that financial distress is costly, and bankruptcy is not always the most efficient resolution.