when a debt is non recourse the lender may liquidate the collateral but may not attempt to collect the deficiency balance non recourse loans are a type of loan where the bank assumes most of the risk 
with non recourse debt the creditor s only protection against borrower default is the ability to seize the collateral and liquidate it to cover the debt owed non recourse debt exampleif an auto lender loans a customer 30 000 at zero interest for a five year loan to purchase a new vehicle the new car s value historically will decline in value following the purchase if the borrower stops making car payments after one year the vehicle may be worth only 22 000 yet the borrower still owes 26 000 with the customer s default the lender repossesses the car and liquidates it for its full market value leaving a deficient balance of 4 000 if the loan was a non recourse loan the lender assumes the loss 