What is Arrearage? Definition and Financial Implications

What Is Arrearage? Definition and Financial Implications

By Kristi Waterworth – Updated Feb 21, 2025 at 11:50 AM EST

Key Points

Arrearage refers to overdue payments, critical for those owning assets like real estate.
Excessive arrearage signals potential management issues in businesses, affecting investment safety.
In finance, arrearage is normal for dividends and bonds, affecting payout sequences.

There are lots of financial terms out there that take complicated concepts and reduce them down to a single word. "Arrearage" is one of them, and if you find yourself in arrearage, it's going to depend highly on context whether it's a good or bad thing. Read on to learn more about this term and the contexts in which it's commonly used.

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A calendar with Payment Due written on it. — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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