Arrears are overdue payments on a recurring financial obligation. The moment a scheduled payment date passes without the full amount being paid, the shortfall becomes a legally recognized debt called an arrearage, and it carries its own enforcement rules, interest, and penalties. The term applies to repeating obligations like child support, alimony, rent, property taxes, mortgages, student loans, and tax bills, not to one-time purchases or lump-sum judgments.
Courts treat arrears as a vested right of the person owed the money. The debt belongs to the recipient the instant the due date lapses, and a debtor generally cannot argue that changed circumstances erase what has already come due. The balance stays fixed until it is paid or resolved through a formal legal process, and in the meantime it tends to grow.
Arrears Compared With Default
People use “arrears” and “default” interchangeably, but they are not the same thing. Arrears describes overdue payments of principal, interest, or fees on a recurring obligation. Default is broader: any failure to meet the terms of a credit agreement or contract, which can include nonpayment but also things like failing to keep insurance on a mortgaged property. A payment in arrears is technically also in default, because the borrower has not met the agreement’s terms. The reverse is not always true.
Debts That Commonly Fall Into Arrears
Almost any recurring obligation can go into arrears, but the legal consequences vary sharply by debt type.
Child Support
Child support arrears are among the most aggressively enforced debts in the legal system. Under a federal law commonly called the Bradley Amendment, each child support payment becomes a court judgment the moment it comes due. These judgments are entitled to full faith and credit in every state and cannot be reduced retroactively. A court cannot go back and lower the amount of arrears that accumulated before the parent formally requested a modification. The only exception is that a court may modify the obligation for the period during which a petition for modification was pending, and only from the date the other parent was notified of that petition.
Child support arrears also survive bankruptcy. Federal law specifically excludes domestic support obligations from discharge, so filing will not eliminate what you owe.
Alimony
Spousal support works similarly. Overdue amounts can be enforced through the same court that issued the divorce decree, and alimony is classified as a domestic support obligation that cannot be discharged in bankruptcy.
Rent
When a tenant misses the rent date set in the lease, the unpaid amount becomes rent arrears. The landlord’s first step is typically a written notice demanding payment within a set number of days, often three to five, though the required period varies by jurisdiction. If the tenant does not pay within that window, the landlord can begin eviction. Leases may also add late fees that increase the arrearage.
Property Taxes
Property taxes fall into arrears when a homeowner misses an assessment owed to the local government. Taxing authorities typically record the unpaid amount as a lien against the property title, which must be cleared before the owner can sell or refinance. If the arrears go unpaid long enough, the government can sell the property at a tax sale. Many jurisdictions offer a redemption period, ranging from several months to a few years, during which the homeowner can pay the overdue taxes plus penalties to reclaim the property.
Federal Student Loans
A federal student loan enters default after payments are 270 days past due. From there, the loan holder can garnish up to 15% of your disposable pay, the Treasury can seize your federal tax refunds and certain federal benefit payments, and the entire unpaid balance plus accrued interest can be accelerated and demanded at once. You also lose eligibility for deferment, forbearance, and additional federal student aid, and the default is reported to all major consumer reporting agencies.
Federal Taxes
Unpaid federal taxes are among the fastest-growing forms of arrears because the IRS layers penalties and interest at the same time. The failure-to-pay penalty is 0.5% of the unpaid tax for each month or partial month the balance remains outstanding, up to a maximum of 25%. On top of that, the IRS charges interest at the federal short-term rate plus three percentage points. For the second quarter of 2026, that rate is 6%.
Mortgage Payments
Most mortgages contain an acceleration clause allowing the lender to demand the entire remaining loan balance, not just the missed payments, once enough payments are missed. Federal rules under Regulation X bar a servicer from filing the first legal notice required for foreclosure until the loan is more than 120 days delinquent, and if you submit a complete loss mitigation application before that filing, the servicer must evaluate you for all available options first. Even after foreclosure has started, you can usually stop it by reinstating the loan, which means paying all missed payments, late fees, attorney’s fees, and other charges in a single lump sum.
How Interest and Penalties Make Arrears Grow
An arrearage rarely stays at the amount originally missed. How fast it grows depends on the type of obligation.
For child support, many states charge a fixed annual interest rate on overdue amounts. Rates vary widely: some jurisdictions charge as little as 4% per year, while others charge 10% or 12%. A handful tie the rate to market factors. Over time, interest alone can add thousands of dollars.
For federal taxes, the 0.5% monthly penalty and the separate 6% annual interest combine to grow the debt quickly. If you receive an IRS notice of intent to levy and still do not pay within 10 days, the monthly penalty jumps to 1%. Setting up an approved payment plan cuts it to 0.25%.
Because the original obligation often keeps generating new payments each month, arrears can compound faster than a person can pay them down. Acting early, before formal collection begins, generally produces better outcomes.
How Arrears Get Collected
Creditors and government agencies have a wide toolkit, and the tools available depend on the debt type.
Wage Garnishment
The Consumer Credit Protection Act limits how much of a paycheck a creditor can take. For most consumer debts, the maximum is the lesser of 25% of disposable earnings or the amount by which weekly earnings exceed 30 times the federal minimum wage.
Child support and alimony allow higher garnishment. If you are supporting a second spouse or child, up to 50% of disposable earnings can be taken. If you are not, the limit is 60%. In either case, an additional 5% can be taken when payments are more than 12 weeks behind.
Liens and Bank Levies
A creditor or agency may place a lien on property you own, blocking any sale or transfer until the arrears are paid. Liens are especially common with tax debts and child support, and they attach to both real estate and personal property. The IRS can also levy a bank account directly. When the IRS sends a levy notice to your bank, the funds in your account are frozen as of the date the bank receives it. Federal law provides a 21-day waiting period before the bank must turn over the money, giving you time to contact the IRS. The levy typically applies only to funds in the account on the date of the levy; money deposited afterward is generally not affected.
Treasury Offset
The Treasury Offset Program matches people who owe delinquent debts to state or federal agencies with federal payments they are scheduled to receive, then withholds part or all of those payments and redirects the money to the debt. In fiscal year 2024, the program recovered more than $3.8 billion.
Passport Denial
If you owe more than $2,500 in child support arrears, your state agency can certify that debt to the federal Office of Child Support Services, which transmits it to the State Department. The State Department will then refuse to issue you a new passport and can revoke or restrict an existing one.
License Suspensions
All 50 states allow suspension of various licenses when a parent falls behind on child support. The licenses affected typically include driver’s licenses, professional licenses for fields like medicine, law, and cosmetology, business licenses, and recreational licenses for activities like hunting and fishing. Suspensions stay in place until the parent sets up a payment plan or clears the arrearage.
Criminal Prosecution
Willfully refusing to pay child support for a child living in another state can lead to federal criminal charges. If the support has been unpaid for more than one year or the arrearage exceeds $5,000, the offense is a misdemeanor carrying up to six months in prison. If it has been unpaid for more than two years or exceeds $10,000, it becomes a felony punishable by up to two years.
How Arrears Affect Your Credit
Most arrears eventually show up on your credit report. Under the Fair Credit Reporting Act, a consumer reporting agency can report delinquent accounts for up to seven years from the date the delinquency began. Bankruptcies can remain for up to 10 years. The downstream effects on loan approvals, credit cards, rental applications, and sometimes employment can last years after the arrearage itself has been resolved.
How Long Arrears Can Be Collected
Not every arrearage can be pursued forever. The IRS has 10 years from the date a tax is assessed to collect it, along with associated penalties and interest. That deadline is called the Collection Statute Expiration Date, and after it passes the IRS can no longer pursue the debt through levies or court proceedings. Certain actions, including bankruptcy, installment agreement requests, and offers in compromise, can pause or extend the 10-year clock.
Child support arrears generally have no federal expiration date. Because each missed payment becomes a court judgment automatically under 42 U.S.C. § 666(a)(9), enforcement can continue as long as the judgment remains valid. Some states impose their own statutes of limitations, but those periods are often 10 to 20 years or more and can frequently be renewed.
For ordinary consumer debts like credit card balances or medical bills, statutes of limitations vary by state and typically run three to six years. Once the period expires, the creditor loses the right to sue, but the debt itself does not vanish and may still appear on a credit report within the seven-year FCRA window.
Ways to Resolve Arrears
Options exist for most types of overdue debt, and acting early expands them.
If a child support obligation has become unaffordable because of a drop in income or other change in circumstances, you can petition the issuing court for a modification. Modifications generally apply only from the date the other parent is notified of the petition, not retroactively, so any arrears that built up before then remain owed in full. Filing promptly prevents the balance from continuing to climb during the review.
For tax arrears, the IRS offers short-term payment plans, long-term installment agreements, and, in cases of genuine financial hardship, offers in compromise that settle the debt for less than the full amount. An approved plan also cuts the monthly failure-to-pay penalty from 0.5% to 0.25%.
Defaulted federal student loans can be brought back into good standing through rehabilitation, which removes the default from your credit report and restores eligibility for deferment and income-driven repayment. A January 2026 proposed rule from the Department of Education would give borrowers a second chance to rehabilitate a defaulted loan; previously only one was available.
For private debts like unpaid rent or credit card balances, creditors sometimes accept a settlement for less than the full amount, especially when they doubt the debtor can pay in full. Forgiven debt above $600 may be reported to the IRS as taxable income, so the tax consequences of a settlement are worth weighing before you agree to one.