Legal Definitions - account debtor

An account debtor is a person or entity that owes a debt or obligation to another party. This obligation can arise from various sources, such as an account, chattel paper, or general intangible.

For example, if a company sells goods to another company on credit, the buyer becomes the account debtor and owes the seller the amount of the purchase. Similarly, if a person takes out a loan from a bank, they become the account debtor and must repay the loan according to the terms of the agreement.

The concept of account debtor is important in commercial transactions and is often used in the context of secured transactions. In such transactions, a creditor may use the account debtor's obligation as collateral for a loan or other financing arrangement.