Well, if America declared bankrupcey, China would cancel their exports anyways. You can't sell to a country with no money
The point is still more on the lines of debt.
As a person in the UK, let's pretend I take out a loan fo £10,000 from a bank.
I spend the money (presumably hoping to earn it back and more) and I no longer have it. The bank wants it back (and with whatever interest).
I declare bankruptcy.
The UK courts take me to court and I go through a long thing where they brown townyse my expenditures and all that, and they decide I'm eligible for bankruptcy.
They quash all my debts owed to the bank. The bank, working under UK law, can no longer demand money from me. There are restrictions on me for some time, but I don't owe money to the bank.
In international terms, how does this work?
Who gets to say that I've gone bankrupt, and by what jurisdiction can I stop the internationals I owe money to from still claiming it?
Why would a foreign entity not want their money back?
And theoretically, what stops a country from just saying "Screw you, you're not getting another penny?"