Recourse debt
 | It has been suggested that this article be merged into Nonrecourse debt. (Discuss) Proposed since April 2024. |
| Public finance |
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Recourse debt is a
home loan or auto loan.[2] Nonpayment of recourse debt allows the lender the right to collect assets or pursue legal action.[3] While mortgages in the US are typically nonrecourse debt, a foreclosure or bankruptcy can trigger the loan to become recourse debt at the request of the lending institution.[4]
Classification
Recourse debt can either be full or limited recourse debt. A full recourse debt gives the granter the right to take any and all assets of the debtor, up to the full amount of the debts. The lender will sell the seized assets, including the asset acquired through the original loan.[5] Limited, or partial recourse debt, relies on the original loan contract, where named assets are the extent to which a lender may take action.[6]
See also
- Nonrecourse debt
- Mortgage loan
- Collateral (finance)
- Security deposit
References
- ^ "Recourse Loans vs. Non-Recourse Loan: What's the Difference?".
- ^ "Home". bestautolenders.com.
- ^ Pritchard, Justin. "Recourse Loans and Non-recourse Loans". Archived from the original on 2009-02-11. Retrieved 2009-07-18.
- ISBN 978-1-57073-626-1.
- ^ "Recourse Loan". BusinessDictionary.com. Archived from the original on 2009-06-26. Retrieved 2009-07-18.
- ^ Renz, Loren; Massarsky, Cynthia W. (1995). "Program-Related Investments: A Guide to Funders and Trends". The Foundation Center.
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