# Pending Liquidation

## Pending Liquidation

### Two Possibilities <a href="#two-possibilities" id="two-possibilities"></a>

If a borrower's health factor goes below 1 or is in overdue condition, borrower's deposited NFT is in the status of pending liquidation, see more in [Risk Models: Health factor or Time-based.](/how-it-works/peer-to-pool-nft-lending-platform/risk-models-health-factor-or-time-based.md) There will be two possibilities:

#### Auction Liquidation <a href="#auction-liquidation" id="auction-liquidation"></a>

A: The first person makes a bid, the liquidation is triggered successfully and the deposited NFT enters the auction process, see more in [Liquidations: Auction Design](#auction-liquidation). If no one follows the auction later, the first person will be the winning bidder.

#### Bad Debt <a href="#bad-debt" id="bad-debt"></a>

B: No one makes the bid. Liquidation process won't be triggered, the deposited NFT will stay in the pools and become Bad Debt, see more in the [Bad Debt](#bad-debt).


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