Why can Japan sustain debts above 200 percent of GDP, while Ukraine defaulted on its debt when it was 30 percent of GDP? This chapter will investigate what factors increase the likelihood of a country defaulting; equivalently, how to assess the sustainability of sovereign debt. It will provide a comprehensive overview of the knowns and unknowns of debt sustainability, including the range of tools available to understand vulnerabilities and inform what will always remain a difficult judgment call. These include the IMF’s DSA framework, and market information and indicators (bond and CDS spreads and sovereign ratings). As the risk of default is not zero, the chapter will also review models of debt limits explaining why a government may find itself to be either unable or unwilling to face its obligations when debt exceeds certain levels. This document is an excerpt of the forthcoming book from Oxford University Press and the IMF that is designed to connect the multiple aspects of sovereign debt policy into one coherent text. For further information please go to our focus: Sovereign Debt: A Guide for Economists and Practitioners http://www.publicdebtnet.org/pdm/archivio-focus/detail-focus/Sovereign-Debt-A-Guide-for-Economists-and-Practitioners-00001/