Short answer: yes, but…
Whenever a bank loan is defaulted upon, money (in the due course of time) is sent off to money heaven. Likewise, when a bank loan is paid back, the bank credit money created by that loan also goes to money heaven.
Now then, what happens when the bond market crashes? Is that a transfer, or does the "money" vanish? In terms of bank credit, its simply a transfer.
However, many people think of very short term bonds as money - say you have a money market account with a balance that shows "$100,000" on it. Most of us have been trained to think of money market funds as being "money". So if the bonds behind that fund default, then most definitely your bond "money" goes to money heaven.
But no actual "bank credit" (M1) vanishes when a bond (even a short term bond in a MM fund) is defaulted upon, or when a stock goes from $100 down to $10.
Thought experiment: let's say you buy $100k in IBM stock from your friend Joe, and then IBM crashes and goes to $10k. Where did the $90k go? Simple - it went to Joe. You transferred $100k to him for the stock. Joe now has $100k, and you have the stock, and $0k. After the crash, you can use that stock to have someone else transfer $10k to you - perhaps Joe again. He then would have both the stock, and the $90k you lost. Stocks (and bonds) are just money transfer vehicles. No (bank credit) money is created or destroyed by the movement of stocks & bonds - only transferred.
However that account balance of yours sure does go down. Your trading account balance reflects: "the amount of bank credit you could instantly transfer from other participants to yourself if you were to sell all your assets at the current instant."
Last wrinkle. When banks take depositor money and "invest" in the stock and bond market, the losses they suffer do actually result in money going to money heaven. My proof? Cyprus. When Greek sovereign debt was defaulted on, that blew a massive hole in the balance sheets of Cyprus banks. Eventually, that was "resolved" through bail-ins, which ended up destroying actual bank credit. That's an example transmission mechanism for stock & bond losses to end up affecting real M1/bank credit: when banks move outside of lending and into stock & bond investments. [Gee, maybe they shouldn't be doing that sort of thing.]
Spanish banks own 30% of the outstanding Spanish sovereign debt. If Spain the sovereign defaults on its debts, it will blow a massive Cyprus-like hole in the Spanish banking system, which will only be resolvable through bail-ins (or bank bankruptcies) and the resulting destruction of bank credit money, which will end up sending a whole lot of depositor money straight to money heaven.