What is required from an account debtor when their accounts are repossessed?

When accounts are repossessed, the account debtor is required to pay the creditor who repossessed the accounts. This ensures that the creditor has a right to enforce their security interest in the accounts receivable. Upon repossession, the creditor effectively steps into the shoes of the original secured party and can collect payments directly from the account debtor.

This requirement is grounded in the principle that when a creditor has a valid security interest in an asset—such as accounts receivable—they have priority over payment claims related to that asset. The account debtor is obligated to fulfill their payment obligations to the creditor who holds the secured interest after the repossession has taken place.

Options suggesting that the account debtor must inform another party, choose whom to pay, or that they are not required to pay anyone do not align with the established legal framework. Instead, the obligation to pay the repossessing creditor ensures clarity and efficiency in the continuity of the financial transactions tied to the accounts.