Credit Delinquencies

DEFINITION of "Delinquent"

Delinquent describes something or someone that fails to accomplish what is required by law or duty, such as the failure to make a required payment or perform a certain action. Delinquency occurs when an individual or corporation with a contractual obligation to make payments against a loan in a timely manner, such as through a mortgage, does not make payments on time. In the case of a mortgage, the lender can initialize foreclosure proceedings if the mortgage is not brought up to date within a certain amount of time.

BREAKING DOWN "Delinquent"

The term "delinquent" commonly refers to a situation where a borrower is late or overdue on a payment, such as income taxes, a mortgage, an automobile loan or a credit card account. There are consequences for being delinquent, depending on the type, duration and cause of the delinquency. People who are late with a credit card payment may be forced to pay a late fee. "Delinquent" also refers to the failure to perform a duty or act in a manner expected of a person in a particular profession or situation. For example, a police officer who does not act in a manner to fulfill his duty to protect could be found delinquent.

Delinquent vs. Default

In a financial sense, delinquency occurs as soon as a borrower misses a payment. This differs from a loan default, which occurs when a borrower fails to repay the loan as specified in the original contract. Most creditors allow a loan to remain delinquent for a period of time before considering it as default; the duration depends on the creditor and loan type. The U.S. federal government allows student debt to be delinquent for 270 days before declaring it to be in default.