A bond is in default when the issuer fails to fulfill its obligations to the bond holder. This can happen when the issuer runs into cash flow problems and, as a result, fails to deliver its interest/coupon or principal payment to the investor. There are times when a default is simply a temporary issue because the issuer is late on payments, and these can be resolved quickly if/when the issuer delivers the late payment. However, defaults can be a sign of deeper cash flow problems and possible bankruptcy. Bonds in default may remain available for trading, but will often trade without accrued interest.
The default proceedings can and will vary significantly between bonds, and investors should check the bond's prospectus for a better understanding of the details should a default occur.
IBKR will send notices regarding bond defaults on a best efforts basis if/when any information is received, however, investors should actively monitor this on their own and may contact the issuer's Investor Relations group for more information as needed.
Should any electable events occur during the process (i.e. tendering the bonds for a new issuance, etc.) then clients will be notified via the message center and can make their election(s) in the client portal, while any mandatory events will be processed automatically.