Arrearage

Arrearage refers to the state of being in debt, specifically when payments for something, such as rent, taxes, or wages, are overdue or unpaid. It signifies an accumulation of past-due obligations. This term often implies a failure to meet financial commitments on a timely basis, resulting in a growing balance of what is owed. The concept is applicable in both personal and institutional contexts, highlighting a lag between the due date and the actual payment. The size of the arrearage directly reflects the extent of the outstanding debt and can significantly impact the financial standing of the debtor. Understanding arrearage is critical for managing finances and avoiding potential consequences like penalties, late fees, or even legal action.

Arrearage meaning with examples

• The homeowner fell into a significant mortgage arrearage after losing their job, facing potential foreclosure. Despite several attempts to catch up, the back payments continued to grow, putting their home at risk. They explored options like loan modifications to manage the accumulating debt and avoid losing their home.
• The company faced substantial utility bill arrearage due to a period of slow sales and production. The unpaid bills triggered a warning from the utility provider about potential service disruptions, impacting their business operations, and the company began looking for a loan.
• The government's tax collection agency pursued legal action against the individual for accumulating a substantial tax arrearage over several years. Failure to remit the taxes resulted in the possibility of asset seizure, demonstrating the severe consequences of these liabilities.
• The child support arrearage for the non-custodial parent had been building over the past five years. The custodial parent pursued legal action to ensure their child received necessary financial support and get the money that was owed.