Navigating the world of financial obligations can be tricky, with many confusing terms related to payment and debt. It is important to gain a full understanding of the legal definitions of the words due, owing, and unpaid to ensure finances are properly managed. Here, we break down the differences between these three terms and how they apply to transactions.
What Does ‘Due’ Mean?
In the matter of finance and business transactions, the term due, or “becoming due,” means that payment due according to an existing agreement must be made. This can refer to debts, taxes, employee benefits, payments to vendors or suppliers, and other financial obligations.
Once payment is due, consequences for non-payment will typically follow, such as interest being added to the payment or a court order in the case of more severe delinquency.
What Does ‘Owing’ Mean?
The term owing refers to an unpaid debt or other form of financial obligation. This term indicates that the debtor has an existing financial obligation and has not yet fulfilled it, or has only partially fulfilled it.
Owing is a commonly used term in business transactions, with lenders, credit card companies, creditors, and debt collectors regularly using it to refer to an unpaid balance.
What Does ‘Unpaid’ Mean?
The most straightforward of the three terms, unpaid refers to a financial obligation, such as a debt or payment, which has not been met or fulfilled according to the external agreement.
For example, if the due date for a particular debt has elapsed but payment has not been received, it is considered to be an unpaid debt.
Understanding the difference between due, owing, and unpaid is important for maintaining proper financial obligations. Knowing the legal definitions of each of these terms can ensure you accurately manage your payments and debts—so you can be sure that what you owe is truly settled.