diff --git a/packages/bruno-app/src/utils/common/index.js b/packages/bruno-app/src/utils/common/index.js
index 6402d5a1e..1c647ae28 100644
--- a/packages/bruno-app/src/utils/common/index.js
+++ b/packages/bruno-app/src/utils/common/index.js
@@ -242,7 +242,7 @@ export const sortByNameThenSequence = items => {
 
     // Check if there's already an item with the same sequence number
     const hasItemWithSameSeq = Array.isArray(existingItem)
-      ? existingItem[0].seq === item.seq
+      ? existingItem?.[0]?.seq === item.seq
       : existingItem?.seq === item.seq;
 
     if (hasItemWithSameSeq) {
diff --git a/packages/bruno-cli/src/utils/collection.js b/packages/bruno-cli/src/utils/collection.js
index 4b698ced9..09d78506c 100644
--- a/packages/bruno-cli/src/utils/collection.js
+++ b/packages/bruno-cli/src/utils/collection.js
@@ -55,7 +55,7 @@ const createCollectionJsonFromPathname = (collectionPath) => {
       }
     }
     let currentDirFolderItems = currentDirItems?.filter((iter) => iter.type === 'folder');
-    let sortedFolderItems = currentDirFolderItems?.sort((a, b) => a.seq - b.seq);
+    let sortedFolderItems = sortByNameThenSequence(currentDirFolderItems);
 
     let currentDirRequestItems = currentDirItems?.filter((iter) => iter.type !== 'folder');
     let sortedRequestItems = currentDirRequestItems?.sort((a, b) => a.seq - b.seq);
@@ -512,6 +512,48 @@ const processCollectionItems = async (items = [], currentPath) => {
   }
 };
 
+const sortByNameThenSequence = items => {
+  const isSeqValid = seq => Number.isFinite(seq) && Number.isInteger(seq) && seq > 0;
+
+  // Sort folders alphabetically by name
+  const alphabeticallySorted = [...items].sort((a, b) => a.name && b.name && a.name.localeCompare(b.name));
+
+  // Extract folders without 'seq'
+  const withoutSeq = alphabeticallySorted.filter(f => !isSeqValid(f['seq']));
+
+  // Extract folders with 'seq' and sort them by 'seq'
+  const withSeq = alphabeticallySorted.filter(f => isSeqValid(f['seq'])).sort((a, b) => a.seq - b.seq);
+
+  const sortedItems = withoutSeq;
+
+  // Insert folders with 'seq' at their specified positions
+  withSeq.forEach((item) => {
+    const position = item.seq - 1;
+    const existingItem = withoutSeq[position];
+
+    // Check if there's already an item with the same sequence number
+    const hasItemWithSameSeq = Array.isArray(existingItem)
+      ? existingItem?.[0]?.seq === item.seq
+      : existingItem?.seq === item.seq;
+
+    if (hasItemWithSameSeq) {
+      // If there's a conflict, group items with same sequence together
+      const newGroup = Array.isArray(existingItem)
+        ? [...existingItem, item]
+        : [existingItem, item];
+      
+      withoutSeq.splice(position, 1, newGroup);
+    } else {
+      // Insert item at the specified position
+      withoutSeq.splice(position, 0, item);
+    }
+  });
+
+  // return flattened sortedItems
+  return sortedItems.flat();
+};
+
+
 module.exports = {
   createCollectionJsonFromPathname,
   mergeHeaders,
diff --git a/packages/bruno-electron/src/utils/collection.js b/packages/bruno-electron/src/utils/collection.js
index dc330dc97..c7120779e 100644
--- a/packages/bruno-electron/src/utils/collection.js
+++ b/packages/bruno-electron/src/utils/collection.js
@@ -489,7 +489,7 @@ const sortByNameThenSequence = items => {
 
     // Check if there's already an item with the same sequence number
     const hasItemWithSameSeq = Array.isArray(existingItem)
-      ? existingItem[0].seq === item.seq
+      ? existingItem?.[0]?.seq === item.seq
       : existingItem?.seq === item.seq;
 
     if (hasItemWithSameSeq) {