What happen to paper clip when it bent

It undergoes plastic deformation as the discontinuities in the crystal structure of the metal slip and rearrange. After repeated bending, the discontinuities become so tangled that they can't slip any more - the metal is said to work harden.

Explanation:

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In metals there is a metal bond. The positive metal atoms are located close together in a metal lattice. The negative electrons of the atoms are free to move in the entire lattice. When the paper clip is bent, the rows of atoms shift against each other, creating a charge imbalance. The freely moving electrons then balance it out.