what happens to the debt after a bank goes out of business?

The banks could:
- go backrupt or merge with another bank that will absorb the debt
- borrow from another bank (but this will likely cause a bank run)
- get a bail-out (unlikely)
- get a bail-in (meaning steal your cash to cut their loses)
- start a world war and hope everyone gets effed so they can contractually nullify their mutual debts
- boost their illegal business income, think drugs, child trafficking, etc.
- influence a military force to absolutely destroy the nation you owe money to and get them to borrow money from you to "save them"
- etc.