---
title: "Account debtor"
url: https://carrierkyc.com/glossary/account-debtor
description: "The account debtor is the party that owes payment on an invoice; in freight factoring, that is usually the broker or shipper that booked the load."
---

# Account debtor

**Definition:** The account debtor is the party that owes payment on an invoice; in freight factoring, that is usually the broker or shipper that booked the load.

Also called: Debtor, Customer. Category: Factoring.

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](https://carrierkyc.com/glossary/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](https://carrierkyc.com/glossary/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.

> **Red flag: Red flags** A new client whose loads all come from one broker you have never seen. A debtor contact reachable only on a mobile number or a free email account. A broker formed or authorized weeks before the first invoice. Clients sometimes invent a debtor, complete with a lookalike domain and a cooperative AP contact, to confirm fake invoices.

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

## Related

- [Notice of assignment (NOA)](https://carrierkyc.com/glossary/notice-of-assignment)
- [Days-to-pay](https://carrierkyc.com/glossary/days-to-pay)
- [Concentration limit](https://carrierkyc.com/glossary/concentration-limit)
- [Broker credit checks and days-to-pay for freight factors](https://carrierkyc.com/guides/broker-credit-and-days-to-pay)
- [How to verify a freight broker before you fund their loads](https://carrierkyc.com/guides/how-to-verify-a-freight-broker)
- [Carrier risk check](https://carrierkyc.com/tools/carrier-check)

## Sources

- [UCC §9-102: Definitions (account, account debtor)](https://www.law.cornell.edu/ucc/9/9-102) (Cornell LII)
- [UCC §9-406: Discharge of account debtor; notification of assignment](https://www.law.cornell.edu/ucc/9/9-406) (Cornell LII)
- [49 CFR 387.307: Property broker surety bond or trust fund](https://www.ecfr.gov/current/title-49/section-387.307) (eCFR, effective 2026-01-16)