What is the definition of an "account debtor"?

The definition of an "account debtor" is indeed a party who owes payment on an account. In secured transactions, an account debtor is a person or entity that owes money to a creditor, usually as a result of a sale of goods or services. This concept is important because it relates to how rights to payment are transferred and secured under Article 9 of the Uniform Commercial Code (UCC).

When a creditor extends credit to a borrower, and the borrower sells goods or provides services, the account debtor emerges as the entity that is obligated to pay for those goods or services. Understanding this role is crucial for secured creditors because enforcing their security interests often involves dealing with account debtors directly, especially in scenarios where the secured party wants to collect payments on accounts receivable.

Other options, while they touch on relevant concepts in secured transactions, do not define an "account debtor." For instance, collateral management pertains to overseeing the assets provided as security, a senior secured creditor refers to a party with a primary claim in a bankruptcy scenario, and real property transactions involve different legal considerations. Therefore, the option reflecting that an account debtor is a party who owes payment on an account aligns accurately with the established legal definition in secured transactions.