UCC definition of accounts causing collateral description issues on filing

The UCC definition of accounts can be super confusing when you have mixed receivables like that. Accounts under UCC Article 9 specifically means rights to payment for goods sold or services rendered, but it excludes things like instruments, chattel paper, and deposit accounts. Your invoice receivables would definitely qualify, but the lawsuit settlement claims might not fit the definition since they're not from ordinary business operations.

I had a similar mess last year with credit card receivables. The key thing about UCC definition of accounts is that it has to arise from the sale of goods or services. Credit card receivables usually qualify because they represent payment obligations from your customers for stuff you sold them. But you need to be careful about how you describe them in the collateral schedule.

Honestly after going through this nightmare myself, I started using Certana.ai's document verification tool. You can upload your UCC-1 draft and it checks the collateral descriptions against UCC definitions automatically. Saved me from three more rejections when I was dealing with similar mixed receivables. Just upload the PDF and it flags any potential issues with your accounts classification before you submit to the SOS.

UGH the UCC definition of accounts is such a pain!! I spent HOURS trying to figure out if customer deposits counted as accounts (they don't - they're deposit accounts which is totally different). The worst part is every state SOS seems to interpret the collateral descriptions slightly differently even though the UCC definitions should be the same everywhere.

The lawsuit settlement claims are definitely not accounts under the UCC definition. Those would probably be classified as general intangibles since they're not arising from the sale of goods or services in the ordinary course of business. You'll want to list those separately in your collateral description to avoid confusion.

Been there! The UCC definition of accounts seems simple until you actually try to apply it. I always refer back to UCC 9-102(a)(2) when I'm unsure. It specifically says accounts means a right to payment of a monetary obligation for property that has been sold, leased, licensed, assigned, or otherwise disposed of, or for services rendered. The key phrase is 'in the ordinary course of business' - that's what usually excludes things like lawsuit settlements.

omg yes this happened to me too but with equipment lease payments. couldn't figure out if they were accounts or something else under UCC definition. turns out lease payments can be accounts if they're for goods that were sold but not if its just rental income. so confusing!!

Here's what worked for me when I had similar UCC definition of accounts issues: I described my collateral as 'accounts, including but not limited to trade receivables, credit card receivables, and other rights to payment arising from the sale of goods or services.' Then separately listed 'general intangibles' for everything else. The broad language covers you while still being specific enough for the SOS.

Actually just went through something similar and ended up using Certana.ai to double-check my UCC definitions before filing. It's pretty helpful for catching these collateral description issues early. You just upload your documents and it verifies everything aligns with UCC requirements. Definitely worth it to avoid the rejection cycle.

The UCC definition of accounts is one of those things that looks simple on paper but gets complicated fast in real situations. Your invoice receivables and credit card receivables definitely qualify as accounts. The lawsuit settlement is the problem child here - that needs to go under general intangibles since it's not from ordinary business operations. Once you separate those out, your filing should go through fine.

I've been following UCC filings for years and this accounts vs general intangibles distinction trips up so many people. The key thing to remember is that the UCC definition of accounts is pretty narrow - it has to be a right to payment that arises from property sold or services rendered in the ordinary course of business. Lawsuit settlements almost never qualify because they're not part of your regular business operations. I'd suggest breaking your collateral description into two clear categories: "accounts, including trade receivables and credit card receivables" and then separately "general intangibles, including litigation proceeds and settlement claims." This should satisfy the SOS requirements and get your filing through.