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LSDefine
Simple English definitions for legal terms
assigned account
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A quick definition of assigned account:
An assigned account is a type of bank account where someone pledges their money as security for a loan. It's like saying, "I promise to pay you back, and if I don't, you can take the money in this account." It's important to be accountable for your debts and make sure you can pay them back.A more thorough explanation:
An assigned account is a pledge of an account receivable to a bank or factor as security for a loan. For example, if a business needs a loan, they may pledge their accounts receivable as collateral. This means that if they don't pay back the loan, the bank or factor can collect the money owed to the business from their customers.
One example of an assigned account is when a construction company pledges their accounts receivable to a bank in exchange for a loan. The bank can collect the money owed to the construction company from their customers if they don't pay back the loan.