What are arrears?
Arrears are late payments. If you have not been paying your bills on time, you are classified as being in arrears. While arrears on unsecured debt may not be recorded instantly on your CRAA report, arrears on Mortgage Payments will be apparent from your monthly loan statements. If you attempt to refinance your mortgage while being in arrears, you will find that traditional lenders will not wish to take up your mortgage. It is therefore important that you clear up all arrears before seeking new loans or loan re-finance. This will not apply to Debt Consolidation Loans. Debt Consolidation is especially the answer for those who are in arrears and are finding it difficult to meet their loan obligations as they fall due.
Arrears happen when you fail to meet your contractual repayments on loans, credit cards, mortgages, rent, rates and other finance. If you are in serious arrears don’t ignore them – get some good debt advice and get your finances back on track. Ignoring arrears will mean you are incurring additional fees and your debts will be growing. If you in this position PLEASE get help.
If a maintenance payment is not made when due under a court order or agreement, that amount of unpaid maintenance is referred to as “arrears.” For example, if an order requires a support payment of $300 per month and the debtor pays only $100, then there are arrears of $200. Additional expenses or court costs included in the order or agreement will also be considered arrears if they are not paid when due. Under the Maintenance Enforcement Act, arrears may be enforced whether they accumulated before or after a client registers with the Maintenance Enforcement Program (MEP). To avoid penalties and interest, MEP expects arrears to be paid in full. If this is not possible, a payment arrangement must be made with MEP staff. Arrangements are based on a debtor’s sworn Statement of Finances. Refer to MEP’s information sheets entitled Statement of Finances (catalogue number 99024) and Deterrent Penalties and Service Fees (catalogue number 99025) for further information. Why have arrears or othe
Arrears occur when an individual is not up to date with their monthly repayments on a loan, mortgage or credit card. Sometimes this can come about simply due to one missed payment which can easily be brought up to date, but in other situations this could be far more serious. For example, an individual may be suffering financial hardship, through any number of reasons and find themselves unable to keep up with the required monthly payments on their loan. They may have to resort to only making part of the payment each month, or worse still, no payment at all. In this situation, significant arrears can build up over a very short period of time and if this trend is not corrected, the loan could fall into default. What is a Default? A loan, or any other credit agreement, can fall into a default situation when the monthly repayments are more than thirty days overdue and the borrower is either unable, or unwilling to make any payments. If someone is in arrears on their credit agreement and is
