Recourse debt is a
debt that is backed by
collateral from the borrower. Also known as a
recourse loan, this type of debt allows the lender to collect from the debtor and the debtor's assets in the case of default as opposed to foreclosing on a particular property or asset as with a
home loan or auto loan. Nonpayment of recourse debt allows the lender the right to collect
assets or pursue
legal action. 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.