Question

what is recourse debt?

Answer 1

Recourse debt is a type of debt which is generally backed by any collateral security which in most of the cases will the property or asset on which loan is taken by the borrower . Here , if borrower makes any default in repayment of loan then lender will have the right to sell the collateral property and realize the loan amount from such sale. Recourse debt is not only limited to this, it also gives the lender right to go after the other assets of the borrower if money is still owed on the debt after the collateral is sold, this features makes major distinction between a recourse debt and a non-recourse debt.