A debt security in an unprofitable company that is likely to go bankrupt. Distressed debt is a term used to explain the properties or bonds of a company that is closly fall bankruptcy, or whose situation may involve such a determination. In some money, investors who determine putting in some cash on the troubled debt of companies are called vulture investors. Distressed debt traders are called such given that they often grab the means then a selected company is troubled or is at dire financial peril. Smart vulture traders always research with possible companies having distressed debt, they will can venture into.