If I really did owe the bank a billion dollars, what would happen?
There's a saying that goes like "If you owe the bank 0 dollars, that's your problem; if you owe the bank 0 million, that's the bank's problem."
Let's adjust for inflation and say that I owe the bank billion. What would they do to come after me and how could I respond?
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If you actually have the billion dollars, the bank would do exactly the same thing they'd do if you owed them 0. They'd try contacting you for the money. If you didn't respond and didn't pay, they'd sue. The court would award the bank the money and you'd have to pay up or face a contempt charge.
The reason the saying exists, though, is for the case where you don't have the money. Let's say that you're the founder of a private company that has grown quite large-- a "unicorn". You own 75% of the company, the company was valued at billion based on the last round of investments, so you're worth billion. Selling your stake pre-IPO would be problematic (both from a tax perspective and from a loss of control of the company perspective) so you do what lots of billionaires do and borrow against your stock so that you can party/ buy a yacht/ build a mansion/ etc. You put up, say, billion in shares and the bank gives you billion. Everyone's happy.
Now something changes and the value of the company drops to 0 million because it comes out that the company is almost out of money. The bank can't repossess and sell the collateral quickly since shares in a private company are a very illiquid asset. You're now only worth 0 million in theory (the total of the assets you bought from the billion loan plus your stake in the company). If you actually tried to sell all your stock, you'd get much less for it (investors get skittish when founders of companies sell off all their shares) and your mansion and yacht aren't going to get what you paid for them initially particularly when the buyers know you're desperate for cash. If the bank forces you to liquidate and sues you into bankruptcy, they might get half of the 0 million which means they're looking at a loss of billion - 5 million = 5 million. Lots of people miss their bonuses (and the bank itself is probably in rocky straights).
So now the debt is the bank's problem. The best way for the bank to deal with their situation is to figure out a way to help you get the company back on solid footing so that its value grows and you can potentially pay back the loan. So they're going to loan the company enough money to deal with its liquidity crisis or find some investors that are going to put more money into the company or otherwise help you get the company into a better financial position. They're going to look at ways to modify the terms of the existing loan-- reducing the interest rate, lengthening the term, etc.-- to make sure that you don't default on it.
Since the size of the loan is large, the loss, if the loan defaulted, to the bank would be significant. As such, the bank would work with you to try to ensure you were capable of paying the loan back. This may involve even extending you more money to keep you from bankruptcy so that you might be able to recover from your financial setback and continue to service the loan. It may also even involve some restructuring of the loan terms to keep you from bankruptcy and enable you to service the loan in some capacity such that the amount paid back and will result in less than a total loss to the bank.
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