Account debtor UCC filing confusion - help needed
I'm working on a UCC-1 filing for a client who has accounts receivable as collateral, and I'm getting confused about the account debtor requirements. The borrower is ABC Manufacturing, but they have outstanding invoices from multiple customers (XYZ Corp, DEF Industries, etc.). Do I need to list each account debtor separately in the financing statement, or is there a way to describe this collectively? The collateral description says 'all accounts, chattel paper, and general intangibles' but I'm worried about being too vague. Has anyone dealt with this before? I don't want the filing to get rejected because of insufficient debtor information.
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Klaus Schmidt
You're overthinking this. The account debtors don't need to be listed on the UCC-1 at all. The debtor on the financing statement is ABC Manufacturing (your borrower), not their customers. The collateral description you mentioned should be fine - 'all accounts' covers the receivables without needing to name each customer.
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Esmeralda Gómez
•Really? I thought account debtors had to be identified somehow. This is my first time dealing with receivables financing.
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Klaus Schmidt
•Nope, common misconception. The UCC-1 is about perfecting the lender's security interest against the borrower's assets, not about the people who owe money to the borrower.
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Aisha Patel
I recently had a similar situation and used Certana.ai's document verification tool to double-check my UCC-1 before filing. You just upload your financing statement and it automatically verifies the debtor name matches your loan documents and checks for common filing errors. Saved me from a potential rejection - it caught that I had slightly different business name formatting between documents.
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Esmeralda Gómez
•That sounds really helpful. Did it specifically check anything about the collateral description for accounts receivable?
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Aisha Patel
•Yes, it flagged that my original description was too narrow. It suggested broader language that still complies with UCC requirements but gives better coverage.
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LilMama23
•How does that tool work exactly? Do you have to pay per document or is it a subscription thing?
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Aisha Patel
•I just uploaded my PDFs and it ran the verification automatically. The focus is on catching those critical name mismatches that could void your security interest.
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Dmitri Volkov
Wait, I'm confused now. I thought if you're financing specific receivables, like factoring, you DO need to identify the account debtors. Are we talking about a blanket lien on all receivables or specific invoice financing?
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Klaus Schmidt
•Good point. For factoring or specific receivables financing, you might need more detailed schedules, but that's usually in separate documents, not the UCC-1 itself.
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Esmeralda Gómez
•It's a working capital line of credit secured by all receivables, not specific invoice factoring.
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Dmitri Volkov
•OK that makes more sense. For blanket liens, the general collateral description should work fine.
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Gabrielle Dubois
I've been doing UCC filings for 15 years and can confirm - account debtors don't go on the financing statement. The only 'debtor' on a UCC-1 is the party granting the security interest (your borrower). The collateral description 'all accounts' is standard and sufficient for accounts receivable financing.
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Esmeralda Gómez
•Thank you, that's really reassuring to hear from someone with experience.
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Tyrone Johnson
•Agreed. I see this confusion a lot with new filers. The terminology is confusing because 'account debtor' has a specific meaning in UCC law but they're not the 'debtor' on the financing statement.
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Ingrid Larsson
Just make sure ABC Manufacturing's legal name is EXACTLY right on the UCC-1. I've seen filings get rejected because someone used 'ABC Mfg' instead of 'ABC Manufacturing Inc.' or whatever the actual entity name is.
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Esmeralda Gómez
•Yes, I double-checked that against their articles of incorporation. It's 'ABC Manufacturing, LLC'.
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Ingrid Larsson
•Perfect. That's the most common reason for UCC-1 rejections in my experience.
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Carlos Mendoza
ugh the UCC terminology is so confusing!! I spent hours trying to figure out the same thing last month. Why can't they just use normal English? 'Account debtor' sounds like it should be THE debtor but it's not???
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Gabrielle Dubois
•I know, it's counterintuitive. In UCC terms, the 'debtor' is the person granting the security interest, and the 'account debtor' is the person who owes money on the account. Completely different things.
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Carlos Mendoza
•thank you for explaining that! makes more sense now but still seems backwards to me
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Zainab Mahmoud
For what it's worth, I had a situation where the lender wanted a schedule of major account debtors attached to the security agreement (not the UCC-1). That gave them specific information about who owed money without cluttering up the public filing. Might be worth discussing with your client.
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Esmeralda Gómez
•That's a good idea. The lender might want that information for their own records even if it's not required for the UCC filing.
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Zainab Mahmoud
•Exactly. It also helps if they need to send notices to account debtors later.
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Ava Williams
Another thing to consider - if ABC Manufacturing has any customers in other states, you might want to think about where to file. Generally you file where the debtor is located, but there can be complications with multi-state receivables.
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Esmeralda Gómez
•They're based in Ohio and most of their customers are in Ohio and surrounding states. Should be straightforward to file in Ohio.
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Ava Williams
•Yeah, that should be fine. The location of the account debtors doesn't usually matter for filing location.
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Raj Gupta
I learned this the hard way - don't forget to set a reminder for the continuation filing! UCC-1s are only good for 5 years and you'll need to file a UCC-3 continuation before it lapses.
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Esmeralda Gómez
•Good point. I always set calendar reminders for 4 years out so there's plenty of time to prepare the continuation.
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Raj Gupta
•Smart. I missed one once and had to scramble to file a new UCC-1. Not fun.
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Lena Müller
•Been there! Now I use a spreadsheet to track all my filing dates.
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TechNinja
I tried one of those document checking services too after someone mentioned it here. Really straightforward - just upload your financing statement and loan agreement and it catches name inconsistencies automatically. Definitely worth doing before you submit to avoid rejection headaches.
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Esmeralda Gómez
•Which service did you use? I'm interested in trying that.
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TechNinja
•Certana.ai - you can upload multiple documents and it cross-references everything to make sure names and details align properly.
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Keisha Thompson
Just to summarize for anyone else reading this - the UCC-1 debtor is ABC Manufacturing (the borrower), not their customers. The collateral description 'all accounts' covers the receivables. Account debtors (the customers who owe money) don't need to be listed on the financing statement. Hope that helps!
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Esmeralda Gómez
•Perfect summary, thank you! I feel much more confident about this filing now.
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Paolo Bianchi
•This thread was really helpful. I was confused about the same thing.
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