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Recourse debt or recourse loan is a debt that is backed by both collateral from the debtor, and by personal liability of the debtor. [2] This type of debt allows the lender to collect from the debtor and the debtor's assets in the case of default, in addition to foreclosing on a particular property or asset as with a home loan or auto loan.
Whether secured debt is recourse or nonrecourse can have significant consequences if the debt is settled in foreclosure of the secured property. [12] Generally, while the net gain or loss is the same regardless of the classification of the debt (it will always be the difference between the basis of the burdened property and the amount of the ...
This case supports the doctrine of U.S. income tax law that a seller of property subject to a nonrecourse debt (as opposed to a recourse debt where the seller may remain liable for any unsatisfied balance remaining after the transfer) realizes an amount that includes the debt assumed by the purchaser. This is an important concept because a ...
A non-recourse loan is a type of debt that’s secured by collateral, such as an individual’s car, house or another typically illiquid asset. Consult with a local financial advisor today. How ...
Commissioner v. Tufts, 461 U.S. 300 (1983), was a unanimous decision by the United States Supreme Court, which held that when a taxpayer sells or disposes of property encumbered by a nonrecourse obligation exceeding the fair market value of the property sold, the Commissioner of Internal Revenue may require him to include in the “amount realized” the outstanding amount of the obligation ...
When to consolidate your debt. If you have multiple high-interest debts and good credit scores or a co-signer who can help you qualify for a better interest rate or terms, consolidating could be a ...
[1] The availability of a deficiency judgment depends on whether the lender has a recourse or nonrecourse loan, which is largely a matter of state law. In some jurisdictions, the original loan(s) obtained to purchase property is/are non-recourse, but subsequent refinancing of a first mortgage and/or acquisition of a 2nd (3rd, etc.) are recourse ...
Debt consolidation may help you save money on interest, pay down debt faster or both. Cons of debt consolidation The 0 percent APR periods on balance transfer cards don’t last forever and will ...