Without Recourse

Without Recourse

Without Recourse means:
words used in factoring accounts receivable or endorsing a note or bill to denote that the holder is not to look to the debtor personally in the event of nonpayment. The creditor has recourse only to the property. Without recourse is a form of exculpation, and such debt is synonymous with nonrecourse debt. A person is not at risk with a nonrecourse debt.

See also other Tax Terms and Definitions in U.S.A.

at risk.

Example of Without Recourse:

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When Claire bought an apartment house, she insisted that the mortgage to the seller be without recourse. In the event that the value of the building declines, Claire may lose the property, but she will lose nothing else.






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