Re: An excellent example ...
can't manage your income-expenditure and owe the bank lots of dosh then it is Time for closure and bankruptcy
That's time for bankruptcy protection. Bankruptcy is when even your creditors taking a haircut and maybe shaving some staff and closing a few stores won't help, your business will be a steaming pile of indebted brown stuff with no future.
Lets be clear about something here - there's no equivalent of bankruptcy for states. You can't fire all the citizens in a country then wind-up that country.
So the thing states always get to is some form of bankruptcy protection. They can still get loans even when they're essentially insolvent - though frankly I've never hear of a totally insolvent country, there's always assets somewhere and always cogs that can crank and produce new wealth.
That all being said there's no evidence that countries like the US and UK are actually at the point of anything like an unmanageable level of debt - if the bond markets and currency markets came under attack they may be but you'd loose a lot of other countries first, and it'd be in no interest of the bond/currency markets to do this.