Inactive means their contract with us/ABC is no longer active and they're not being billed. It's agreement/contract based.
If someone has indicated that they want to cancel their contract, they remain as "active" but they have a "status message" string that indicates they'll be cancelling.
If ABC has stopped trying to collect from them, they go into the "WriteOff" status. Before that point, they have a "status message" string that indicates they're delinquent on payments, but they remain an "active" member (in ABC).
To help categorize these "contract statuses" and "status messages", we have the concepts of green, yellow, red, blue colors of a member.