When a company fails the bond holders get paid first. Bonds are also the rich man's way of getting paid by governments. Lending money to finance war has always been a nice way to trap governments.
If your investments are all inside the country That defaults on its debt then yeah your fucked anyway, but if you're investing in a country's debt and you have little other exposure to said country, then their defaulting on the debt is the only thing that's fucking you. Argentinas default is the best example of this problem.