Arrearage legal definition of Arrearage

One refers to payments in arrears that are meant to occur after they are owed, such as wages paid a week after time is entered or for invoices. Arrearage also can mean a person or business that is behind on paying bills, debts, or other obligations. When being used in this form, arrearage often involves debts piling up over time, signaling a warning of insolvency.

  • (f) Subsections (b) and (c) apply to a money judgment for child support rendered on or after Jan. 1, 2002.
  • Past-due child support payments accruing after the establishment of the current support order shall draw interest from the date they become delinquent.
  • If the annuities are due at the end of the period such as mortgage payments, they are called an ordinary annuity or annuity in arrears.
  • Arrears refers to the actual unpaid obligation to a debt, while arrearage refers to the condition of being in debt.
  • Interest awarded shall only be simple interest and nothing in this section may be construed to permit awarding of compound interest.

It basically allows space to get what you need before meeting your obligations. Not in certain contexts, such as in bond trading, when arrears is a reference to payments that are made at the end of a specified period. Mortgage interest payments are paid in arrears and only suggest a negative connotation when the due date has passed. An amount on a loan, cumulative preferred stock or any credit instrument that is overdue. (d) Subsection (a) applies to a child support payment that becomes due on or after Jan. 1, 2002.

Synonyms of arrearage

Except as provided in subsection (5), a surcharge ordered by the court applies until abated by the court. Interest on periodic payments for child, spousal, or medical support shall not accrue until thirty days after the payment becomes due and owing and shall accrue at a rate of ten percent per annum thereafter. Another example Cornell Law School provides of arrearage involves preferred stock. Arrearage, in this case, is where a business is in arrears but rather than paying back the owed funds to a landlord, the business has to pay owed funds to preferred shareholders. When in arrearage, preferred shareholders have priority over a company’s income and are paid their dividend first. Take the example of a telecom corporation that has a cumulative preferred stock with an annual dividend amount of $20,000.

  • (c) In order to recover penalties assessed under subsection (b) of this section, the obligee shall file with the clerk of court a sworn affidavit setting forth the payment history resulting in assessment of any penalty and a computation of all penalties claimed to be due and owing.
  • The court shall assess interest on the amount of support an obligor failed to pay if the court determines the failure to be willful and the arrears accrued after July 15, 1992.
  • Fixed at a rate equivalent yield of the average accepted auction price for the last auction of one-year Treasury bills.
  • However, the obligee can initiate a court action to obtain a judgment for interest.
  • The dividends in arrears must be disclosed in the footnotes to the financial statement.

The company is also restricted from making any dividend payouts to common shareholders until it settles its dividends payable account. Interest accrues on support debts at the rate provided in section 535.3 for court judgments. The administrator may collect the accrued interest but is not required to maintain interest balance accounts. The department may waive payment of the interest if the waiver will facilitate the collection of the support debt. (2) All judgments for unpaid child support that have accrued under a superior court order or an order entered under the administrative procedure act shall bear interest at the rate of 12%.

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Cumulative preferred stock allows for the accumulation of any undeclared preferred dividends from prior periods and the preferential distribution in later periods, before any new dividends and common dividends. The word arrears means “end of period” when referring to annuities (an annuity is series of equal amounts occurring at equal time intervals, such as £1,000 per month for 20 years). If the recurring amount comes at the end of each period, the annuity is described as an annuity in arrears or as an ordinary annuity. For example, you borrow £10,000 on September 30 and your first monthly payment will be due on October 31, the second payment will be due on November 30, and so on. (f) Subsections (b) and (c) apply to a money judgment for child support rendered on or after Jan. 1, 2002. A money judgment for child support rendered before that date is governed by the law in effect on the date the judgment was rendered, and the former law is continued in effect for that purpose.

Why making the monthly payment still matters

(c) Interest accrues on a money judgment for retroactive or lump-sum child support at the annual rate of 6% simple interest from the date the order is rendered until the judgment is paid. (iii) On or after July 1, 2018, interest shall not accrue on arrearages in Title IV-D cases unless the court makes a written finding that interest shall continue to accrue. In making such finding, the court shall set the rate at which interest shall accrue after consideration of any factors the court deems relevant; provided, that the interest rate shall be no more than six percent (6%) per year.

Dictionary Entries Near arrearage

A non-assistance custodial parent is an individual who completes an application for IV-D services (see Sections 160.5 and 160.10). There comes a time in our lives that we get word of an unexpected situation that causes financial tension. Or, perhaps taxes or fees have increased on products or a service we didn’t expect. Maybe a company suddenly changes how a customer pays them and needs payments in advance of its service. For example, we often see that a gym membership’s accounting program has changed and members have to pay their fee in advance.

Great Big List of Beautiful and Useless Words, Vol. 1

Arrears, or arrearage in certain cases, can be used to describe payments in many different parts of the legal and financial industries, including the banking and credit industries, and the investment world. The term can have many different applications depending on the industry and context in which it is used. On the other hand, while preferred shareholders do not have voting rights—even if they achieve an ownership stake in the issuing company, they enjoy other perks, such as higher claims on company assets then common shareholders, in the event of bankruptcy situations. Furthermore, the dividend payouts to preferred shareholder behave like bonds, in that they are locked in at fixed rates—a characteristic attractive to more risk-averse investors.

This yield, rounded to the nearest one percent, or four percent, whichever is greater, shall be the annual interest rate during the succeeding calendar year. The state court administrator shall communicate the interest rates to the court administrators and sheriffs for use in computing the interest on verdicts and shall make the interest rates available to arbitrators. Being in arrears refers to being overdue on payment owed to your landlord.

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