The liquidation occurs only if the loan is not repaid on the date predefined at the time of the loan. The NFT then automatically enters the liquidation process. The status of your loan turns red and displays "Auction" in your Dashboard.
The NFT is put up for sale through a Dutch auction mechanism. The starting price is defined as 3x the maximum loanable at the time of the loan down to zero. At any time the NFT can be purchased.
As long as the NFT is not sold, the liquidating borrower can buy back this NFT at the original loan price plus the interest due for the additional term.