Delinquency, in debt terms, is a failure to meet the legal arrangements set forth between borrowers and creditors when a borrower falls behind on the agreed payment terms. Usually, a borrower will be given options to help them catch up, such as smaller installment payments or interest-only payment arrangements for a duration of the loan. Delinquency is the category before an account is sent to the collection category. In a delinquency, the borrower is reminded of their legal obligations under the contract and is assited in coming up with an arrangement (if possible).
An account will only be considered to be in the delinquency category for a set amount of time, usually between 30–90 days, before it is removed from that classification and sent on for debt collection as an unpaid debt.