Arrears is money you already owe

Arrears is the amount of money you owe on a bill or loan because you missed one or more payments. If your rent was due on the first of the month and you didn't pay it, that unpaid rent becomes arrears the moment the due date passes. The same applies to utilities, credit cards, medical bills, or any other debt with a payment important date.

The word itself comes from the idea of being "in arrear" — behind. Once you're behind, every day that passes adds to the total you owe. If you owed $1,200 in rent for January and $1,200 for February, and you paid neither, you now have $2,400 in arrears. That's the total of all the missed payments stacked together.

Understanding arrears matters because it changes how money moves when you get help. When a program pays on your behalf — whether it's an emergency rental fund, a utility information program, or a loan modification — the money often goes toward arrears first, not toward future payments. That's why knowing exactly how much you're behind is the first step in getting back on track.

Key Takeaways

  • Arrears is the total amount you owe because you missed payments; it grows each billing period you don't pay.
  • When information programs pay your bills, they usually cover arrears before future payments, so you start fresh rather than staying behind.
  • Your creditor or landlord can charge late fees on top of arrears, and these fees are separate from the original debt.
  • Knowing your exact arrears amount — down to the specific bills and dates — is necessary before you can pursue most forms of payment help.
  • Arrears can trigger legal action like eviction or utility shutoff, which is why addressing it quickly matters even if you can only pay part of it.

How arrears grows and what happens if you don't pay

Arrears doesn't stay the same. Each time a payment comes due and you don't make it, that new missed payment gets added to your arrears total. If you're behind on rent, your arrears grows by one month's rent each month you don't pay. If you're behind on a credit card with a $500 minimum payment, your arrears grows by $500 each month.

On top of the original amount you owe, most creditors add late fees. A landlord might charge a late fee of $50 or $100 per month. A utility company might charge a reconnection fee if your service was shut off. A credit card company adds interest on the unpaid balance. These fees are separate from the arrears itself — they're extra money you owe because you didn't pay on time. This is why a small missed payment can balloon quickly.

If arrears goes unpaid long enough, the creditor can take legal action. A landlord can file for eviction. A utility company can shut off your service. A credit card company can sue you or send your debt to a collection agency. These actions don't erase the arrears — they make it harder to pay because now you're also dealing with court dates, service interruptions, or damage to your credit report.

The difference between arrears and current payments

This distinction matters when you're looking for help. Current payments are the bills you owe going forward — rent due next month, a utility bill for the coming month, a loan payment that hasn't come due yet. Arrears is what you already owe from the past.

Most information programs prioritize arrears over current payments. An emergency rental fund will pay the $3,000 you already owe before it pays next month's $1,200 rent. A utility information program will cover the bill you missed in November before it covers December's bill. This makes sense from the program's perspective — they're trying to stop eviction or shutoff, which happens because of arrears, not because of future bills you haven't missed yet.

The catch is that some programs won't help you if you're not yet behind. If you're current on all your bills but worried you can't pay next month, many programs won't cover you until you actually miss a payment. This is why the timing of when you reach out for help matters. Waiting until you're behind may make you may be able to access for arrears information, but it also means you're now facing late fees and legal risk.

How to find out exactly how much arrears you owe

Before you can pursue help, you need a specific number. Contact the person or organization you owe money to — your landlord, your utility company, your lender — and ask for an arrears statement or account statement. This document shows every payment you've made, every payment you missed, and the total you currently owe.

Ask for the statement in writing if possible. Email is fine. You want it dated and signed so you have proof of the amount if you later dispute it or if you're working with an information program. The statement should break down the arrears by month or billing period, show any late fees that have been added, and include the date as of which the amount is accurate.

If you're behind on multiple bills — rent and utilities, for example — get a separate statement from each creditor. Don't estimate or guess. information programs need exact figures, and creditors sometimes disagree about what you owe. Having the official statement protects you and speeds up the process when you're ready to get help.

Arrears and your credit report

Arrears shows up on your credit report once it's been unpaid for 30 days or more. A missed payment becomes a mark on your credit history that lenders, landlords, and sometimes employers can see. The longer the arrears sits unpaid, the worse the damage — a 60-day late payment looks worse than a 30-day one, and a 120-day late payment is worse still.

Paying off the arrears doesn't erase the late payment from your credit report when ready. The late payment stays on your report for seven years from the original due date, even after you've paid it. However, paying it off does stop it from getting worse, and it shows future creditors that you eventually made good on the debt. Over time, as you make on-time payments going forward, the impact of the old arrears shrinks.

This is another reason to address arrears as soon as you can. The longer it sits, the more damage it does to your credit score, and the harder it becomes to borrow money, rent an apartment, or get approved for other services in the future.

When information programs pay arrears directly to creditors

Many programs — emergency rental information, utility bill help, mortgage information — work by paying your creditor directly rather than giving you the money. You provide the program with proof of your arrears (that statement you got), and they contact your landlord, utility company, or lender and send the payment straight to them.

This protects both you and the program. The creditor gets paid and stops the eviction or shutoff process. You don't have to worry about the money being misused or intercepted. The program knows the money went where it was supposed to go. In most cases, the creditor sends the program a receipt showing the payment was received and applied to your account.

The downside is that you have less control over the timing. The program decides when to send the payment, not you. And if your creditor refuses the payment for some reason — which is rare but happens — the program may pay you directly instead, or they may require you to resolve the issue before they can help. This is why it's important to tell your creditor upfront that you've applied for information and that a payment may be coming.

Partial payments and payment plans when you can't pay all arrears at once

You don't always have to pay off all your arrears in one lump sum. Many creditors will accept a payment plan — an agreement to pay the arrears in smaller chunks over time. A landlord might agree to let you pay back three months of rent at $400 per month instead of all at once. A utility company might let you add half of your arrears to your next bill and the other half to the bill after that.

Payment plans are negotiated directly with your creditor, not through an information program. Call or visit in person and explain your situation. Be specific: "I owe $2,400 and I can pay $400 a month starting next week." Creditors are often willing to work with you because a payment plan is better for them than eviction, shutoff, or sending your debt to a collection agency. Get any agreement in writing so you both know what was promised.

If you're working with an information program, ask whether they can cover part of your arrears now and whether your creditor will accept a payment plan for the rest. Some programs have limits on how much they'll pay per household or per bill, so a combination approach — program money plus a payment plan — might be your best option.

Frequently Asked Questions

Does arrears include late fees?

Late fees are separate from arrears but are often added on top of it. Your arrears is the original missed payment; the late fee is extra money the creditor charges for missing the important date. Both amounts together make up your total debt. Some information programs cover late fees, but not all, so ask before you explore.

Can I be evicted if I have arrears but I'm making a payment plan?

It depends on your lease and local law. If you have a written payment plan agreement with your landlord, most landlords won't file for eviction as long as you stick to the plan. But get the agreement in writing — a verbal promise isn't enough protection. If you miss a payment on the plan, the landlord can resume eviction proceedings.

What if my arrears is so old that I don't remember exactly how much I owe?

Contact your creditor and ask for a current account statement. They have records of every payment and every missed payment. If the creditor is no longer the original one — if your debt was sold to a collection agency, for example — ask the collection agency for the same statement. You have the right to this information under consumer protection laws.

Does paying arrears improve my credit score right away?

Paying off arrears stops it from getting worse and shows future creditors you eventually paid, but it doesn't erase the late payment from your credit report. The late payment stays for seven years. However, as you make on-time payments after that, your score gradually improves because recent payment history matters more than old history.

Can I negotiate with my creditor to forgive part of my arrears?

Some creditors will accept a settlement — an agreement to pay less than the full amount owed. This is more common with credit card companies and collection agencies than with landlords or utilities. If you're interested, contact your creditor and explain your situation. Be prepared to offer a specific amount you can pay. Get any settlement agreement in writing before you pay.