This paper studies the role of market-based solutions in the enforcement of sovereign debt contracts. A simple theoretical framework implies that there is scope for bondholders' committees to improve the governance of the market, as measured by the frequency and outcome of defaults.We test this hypothesis with an original data set of sovereign defaults, 1870–1913. This first period of financial globalization is an ideal test ground as it wasimmuneto interventions by multilaterals, which can aggravate moral hazard problems during arrears. The empirical results confirm the potential relevance of bondholder's self-help organizations for ordered workouts of defaults.