If the rebalancing process fails, your position could eventually reach the Liquidation line.
If that happens, the rest of the position is entirely closed. It uses the same mechanism as described in the Rebalancing section, with two differences:
The entirety of the debt is burned (xPOSITION) or repaid (sPOSITION)
The liquidation bounty isn't necessarily the same as for rebalancings