What does arrears mean?

Arrears is money that is owed and should have been paid earlier. It is a financial and legal term and refers to the status of payments concerning their due dates. If someone has not paid their mortgage in a few months, that account would be in arrears.

For something to be in arrears, there must be a contractual requirement that regular payments are made. An account is not in arrears if someone just owes their friend money without a contract. An account is in arrears, so an account must exist for this to occur.