Arrears

Arrears describes money that is overdue or unpaid after it was due. In finance and everyday use, arrears refer to payments that should have been paid earlier but remain unpaid, often becoming due for payment with added interest or penalties. The term is used in both plural and singular forms, though arrears is most common.

Common contexts include rent arrears, where tenants fail to pay rent on time; wage arrears, where an employer does not issue wages as scheduled; tax arrears, where taxes remain unpaid to a government authority; and loan or mortgage arrears, where installments are late. Benefit arrears can occur when payments from government programs are delayed or backdated.

Accounting and law treat arrears as liabilities or due obligations. In payroll practice, payments made in arrears are wages paid after the period they cover. In debt management, arrears may accrue interest and penalties, and repeated arrears can lead to collection actions, restructuring, or enforcement such as eviction in the case of rent, or foreclosure in secured loans. Legal remedies and time limits vary by jurisdiction.

Remedies include notifying the debtor, negotiating a payment plan, applying late fees, or pursuing formal collection or court action. Eviction for rent arrears may be pursued where permitted. Prevention relies on clear due dates, reminders, and effective credit or rent controls. The term arrears contrasts with payments made in advance or with current payments. See also: back pay, overdue debt, default, debt collection.