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A margin account with debt can be liquidated when its health factor is 1.10 or below. There is no grace period, and anyone can liquidate it; your signature isn’t needed.
Health Factor must be strictly above 1.1 for a debt-bearing account to be healthy. Liquidation eligibility also depends on oracle and execution checks; displayed snapshots can lag current state.

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What happens

1

A liquidator repays all your debt

The liquidator pays every loan in full, from their own tokens, back to the Vanna pools.
2

Your Farm positions go to the liquidator

Blend supply is withdrawn straight to the liquidator, and Soroswap / Aquarius LP tokens are transferred to them.
3

Your remaining tokens go to the liquidator

Every token left in the margin account is swept to the liquidator.
Liquidation takes all remaining collateral, not just the debt plus a bonus. Nothing above the debt comes back to you. The account itself stays open (empty, with no debt) and can be used again.

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How to avoid it

Watch the buffer

The Liquidation card shows how many dollars you can lose before 1.10. Keep it large.

Repay or add collateral

Repaying debt or depositing more both raise the health factor straight away.
  • Remember that interest keeps adding to your debt, and a stablecoin loan against XLM loses health when XLM falls.
  • Farm positions can’t repay a loan directly. Exit them first, which takes extra transactions; don’t leave it to the last minute.
  • Analytics → Liquidations shows accounts that can be liquidated now and how close others are.

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Settling an account yourself

Separately from liquidation, the contract offers owner-authorized settlement: it unwinds Farm positions into the margin account and repays debt from its balances. What’s left stays in the account until you withdraw it.
At or below a Health Factor of 1.1, a priced account with debt is a liquidation candidate. The current liquidation path transfers remaining collateral to the liquidator; it does not automatically close the SmartAccount.
See Health Factor and the technical liquidation page.