A debt crisis occurs when a country or organization cannot meet its debt obligations, leading to defaults on loans or bonds. This situation can arise from excessive borrowing, economic downturns, or poor financial management. When debts become unmanageable, it can result in severe economic consequences, including reduced public services and increased unemployment. Debt crises can affect not only the borrowing entity but also global markets. Investors may lose confidence, leading to higher borrowing costs and reduced investment. Countries like Greece and Argentina have experienced notable debt crises, prompting international organizations like the International Monetary Fund to intervene with financial assistance and restructuring plans.