# Liquidation Liquidation occurs when a user's collateral is sold to repay outstanding debt. It is governed by **Liquidation Collateral Factors**, which should not be confused with the Borrowing Factor. The Liquidation Collateral Factor is higher than the Borrowing Factor, meaning that if a user's position falls between these two values, they cannot borrow additional assets but can provide more collateral or repay part of their debt. When an account’s borrow balance exceeds the limits set by the liquidation collateral factors, it becomes **eligible for liquidation**. A liquidator — whether a bot, contract, or user — can take action to seize the collateral and return its value, minus a **Liquidation Penalty**, to the user in the base asset. After liquidation, the user will have no remaining debt and typically will have a surplus balance in the base asset. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.swaylend.com/borrowing-base-asset/liquidation.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.