Most states are actually recourse states. Still, you can file bankruptcy and
wipe away any deficiency judgment or potential judgment on a mortgage. The only consumer debt that survives bankruptcy are student loans. Those
are nearly impossible to discharge except under the most dire of circumstances, such as brain death. Many European countries do not have the same kind of bankruptcy system as the U.S. Even after the 2005 Bush Bankruptcy law "reform", the U.S. retains one of the most debtor friendly BK regimes (except for student loans, which are treated on par with criminal fines). Other countries offer alternative to bankruptcies however, such as Canada's consumer proposal option.
Gauche
My belief was that most US mortgage loans are non-recourse loans. That
means if
the borrower defaults, perhaps through bankruptcy, the lender bears the
losses.
Most European mortgage loans are recourse loans, which means that europeans
are hounded by their lenders even after bankruptcy. (I could be wrong.)
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