Do the § 465 At-Risk Rules Treat Recourse Debt and Nonrecourse

question 14

Essay

Do the § 465 at-risk rules treat recourse debt and nonrecourse debt differently?

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Definitions:

Novation

The act of replacing one obligation with another by mutual agreement between all parties involved, essentially creating a new contract while cancelling the old one.

Right of Recovery

The legal ability to reclaim goods or compensation under the terms of an agreement or through legal proceedings.

Trustee

A person licensed to receive and dispose of the assets of a bankrupt, then distribute the proceeds to the creditors.

Beneficiary

An individual or entity entitled to receive benefits or assets from a trust, will, or life insurance policy.