DEFINITION of 'Arrearage'

An amount on a loan, cumulative preferred stock or any credit instrument that is overdue.

Also referred to as "arrears".


In the case of a preferred dividend, if the company does not pay the dividend to its shareholders, it accumulates. This means that in the future, arrearage must be paid before any dividend can be paid on common stock.

  1. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  2. Default Rate

    This rate can be used in reference to two main things: 1. The ...
  3. Default

    1. The failure to promptly pay interest or principal when due. ...
  4. Cumulative Dividend

    A sum that publicly traded companies must remit to preferred ...
  5. Insufficient Funds

    Occurs when an account cannot provide adequate funds to satisfy ...
  6. Common Stock

    A security that represents ownership in a corporation. Holders ...
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