Legal Definitions - one-action rule

The one-action rule is a principle in debtor-creditor law that states that if a debt is secured by real property, the creditor must first foreclose on the collateral before going after the debtor's unsecured assets. This means that the creditor cannot sue the debtor for the debt without first taking legal action to foreclose on the property.

For example, let's say that John borrowed $100,000 from a bank to buy a house. The loan is secured by the house, which means that if John fails to make his payments, the bank can foreclose on the property to recover the debt. However, if John also has a car that is not collateral for the loan, the bank cannot simply sue him for the debt without first foreclosing on the house.

The one-action rule is designed to protect debtors from having their unsecured assets seized without first having the opportunity to address the debt through the foreclosure process. It also ensures that creditors are not able to pursue multiple legal actions against the debtor for the same debt.