nonrecourse debt

Definition

Debt for which the borrower is not personally liable. In the event of default, the lender has access to the collateral and nothing else.

Use nonrecourse debt in a sentence

You should always try and make sure that you pay off any nonrecourse debt before the time that it is owed.

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When a pawnbroker gives you a loan for your car, it is a nonrecourse debt because if you don't pay, the only think they can do is keep your car.

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After compiling a measure of the defaulted loan-holders personal finances and credit accounts, it became apparent that he/she met the requirements to invoke the nonrecourse debt clause; therefore, the institution would only collect the collateral listed in the original contract.

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nonrated nonrecourse expense