Explore commonly used personal finance terms.
Arrears are outstanding payments owed on a debt or financial obligation. When payments are overdue, they are said to be “in arrears,” and they may accumulate penalties or additional interest charges. Arrears can occur in various financial obligations, such as loan payments, utility bills, or rent. Failing to clear arrears can harm credit scores, and creditors may take legal action to recover the debt if the payments remain unpaid for an extended period.
