Legal Word of the Day
Entry: Arrears
Pronunciation: uh - reerz
Definition: a debt which is overdue because of a missed payment(-s)
In short, to be in arrears (also called rearage) means to have a debt that remains unpaid. The term "arrears" occurs in many different types of situations, including late payments for child support, bills, rent, and other obligations.

Being in arrears on a debt does not necessarily mean you’re in trouble with the law or that you’ll receive a late charge – that depends on the particular circumstances of the arrears. However, the longer you fail to pay the debt and the larger the debt is the more likely that law enforcement and/or collection agencies will be attempting to collect on the debt

Also, "arrears" may be referred to as making a payment at the end of a period. For example, many types of payments are supposed to be paid in arrears (i.e. after an event), such as mortgages on a house, salaries, certain contract agreements, etc. So, the context in which the term "arrears" is used will often help to give it its meaning.

Related Legal Words