Arrears Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Arrears, written in plain English, along with examples of how it is used.
What is Arrears?
(n) Arrears is the amount due to a person or entity by virtue of an agreement or obligation which is not paid or otherwise settled as on that date. Eg. Salary arrears, rent arrears etc. The term is associated with liability on account of regular services or obligations.
History and Meaning of Arrears
Arrears is a legal term that has been around for centuries. It refers to the amount of money that is owed to an individual or entity due to an agreement or obligation. It is common for arrears to occur when someone fails to make a regular payment or fulfill a contractual obligation. Arrears can occur with things like rent, utilities, and taxes.
For example, if a tenant does not pay rent on time, they may be in arrears. Similarly, if a borrower misses a loan payment, they may be in arrears. The term can also be used in the context of salary and wages when an individual has not received their full amount due, there are referred to as being in arrears.Then, they will get an amount in arrears.
Examples of Arrears
- John has not paid his rent for the past three months. He is now in arrears with his landlord.
- The company has failed to pay its employee's salaries for the past two weeks, which means its workers are now in arrears.
- Maria has missed two car payments, which has put her in arrears with the lender.
- James owes several thousand dollars in back taxes, which have accrued over several years.
Legal Terms Similar to Arrears
- Debt - Debt refers to any money that is owed to an individual or organization by another entity.
- Default - Default occurs when an individual or company fails to fulfill a contractual obligation, which is often in the form of non-payment or non-performance of their duties.
- Overdue - Overdue is a term used to describe a situation where a payment or obligation is past due and has not been paid or fulfilled yet.