Account debtor

UCC Article 9 defines an account debtor as a person obligated on an account. In a freight deal the carrier is your client, the assignor, and the broker or shipper that owes the invoice is the account debtor. Confusingly, the UCC calls your client the debtor, so keep the two straight in contracts and filings.

The account debtor is where your money actually comes from. A clean carrier with perfect paperwork still loses you money if the broker pays slowly, disputes the load or fails. That is why factors set credit limits per debtor, track days-to-pay, and watch broker authority and bond status. Under the broker financial responsibility rule in force since 2026-01-16, FMCSA suspends a broker whose $75,000 bond or trust drops below the minimum and isn't restored within 7 business days of FMCSA's notice.

Your notice of assignment goes to the account debtor. Under UCC §9-406, once it receives an authenticated notice that the invoice was assigned and that payment goes to you, it can discharge the debt only by paying you.

General information, not legal advice. Confirm state-specific questions with your counsel.