Arizona Debt Relief Options
Key takeaways
- Debt relief options in Arizona are similar to those in other states.
- Debt collectors have to follow federal law in Arizona. The Fair Debt Collection Practices Act protects you from harassment, abuse and unfair treatment.
- The statute of limitations on debt in Arizona ranges from four to 10 years depending on the kind of debt you owe.
Arizona debt relief options
Debt relief programs in Arizona are similar to those in other states. Here are some of the best debt relief options depending on your current financial situation:
DIY budget
Best if you can afford to put more money toward your debts every month
You can create your own budget and use strategies like the debt avalanche or debt snowball method to knock out your debts one by one.
Get started by creating your own budget to pay off debt.
Credit counseling
Best if you don’t know where to start
A credit counselor can take an objective look at your finances and suggest different strategies to tackle your debt based on what you can afford. Your counselor will consider budgets called debt management plans, debt consolidation, debt settlement and even bankruptcy.
Get started by working with a certified credit counselor.
Debt consolidation
Best if you have high interest rates across multiple debts
When you consolidate your debt, you use a credit card or loan to pay off multiple existing debts. Then you make a single payment to your new credit card company or lender. You can save money on interest by getting a lower interest rate on your new credit card or loan.
Get started by comparing 0% APR credit cards (for good to excellent credit) and debt consolidation loans.
Debt settlement
Best if you can’t afford to pay off your debt any other way
Debt settlement means negotiating with your creditors to pay off your debt for less than you owe, but it comes at a price — your credit. Debt settlement affects your credit and stays on your credit report for seven years. Talk to a credit counselor before working with a debt settlement company or negotiating a settlement yourself.
Get started by learning more about debt settlement versus debt consolidation.
Did you know you can call your credit card company to ask for a lower rate? You can. And 76% of people who asked for a lower credit card rate got one.
Debt collection laws in Arizona
You have rights when it comes to debt collection in Arizona. A federal law called the Fair Debt Collection Practices Act protects you from abusive, unfair and misleading treatment from debt collectors.
When you haven’t paid a debt — like a bill, credit card or loan — the company you owe can sell it to a debt collection agency. But debt collectors have to follow the law, and there are regulations about when and how they can contact you and collect the debt.
For instance, a debt collector must send you a debt validation letter to identify who they are, where the debt came from and how much you owe. You also have the right to dispute the debt or ask for more information within 30 days of receiving this letter.
If a debt collection agency is violating your right to fair treatment or if you think it’s a scam, file a complaint with the Arizona attorney general.
You can also call 602-542-5763 if you’re in Phoenix, 520-628-6648 if you’re in Tucson or 800-352-8431 if you’re anywhere else in Arizona.
Debt statute of limitations in Arizona
The statute of limitations on debt in Arizona depends on the kind of debt you owe:
- Car loan (if car was repossessed): Four years
- Credit card debt (and debt from written contracts): Six years
- Medical debt: Six years
- State tax debt: 10 years
If the statute of limitations hasn’t expired, your lender or debt collector can sue you over the debt you owe. Once the statute of limitations has passed, your debt becomes time-barred debt, meaning that you can’t be sued for it. This doesn’t wipe out your debt — you just won’t have to go to court over it.
Arizona debt statistics
Arizonans have slightly more debt overall than the national average, but household financial insecurity (not being able to make ends meet) is in line with the average across the U.S.
Here’s how debt in Arizona compares to national averages:
- Monthly debt payments: Arizonans pay $1,616 monthly toward debt versus the national average of $1,597
- Total credit card debt: On average, Arizonans have $7,842 in credit card debt versus the national average of $7,236
- Financial insecurity: 36.2% of Arizona households versus 36.4% of American households report it’s hard to pay usual expenses
Arizonans may be in slightly more debt on average, but Arizona’s consumer protection laws make payday loans illegal. Loan interest rates are capped at 36% in Arizona, protecting residents from predatory loans.
Frequently asked questions
There’s more than one Arizona debt relief program. If you live in Arizona and have debt, you can find debt relief by:
1. Creating a plan to pay off your debt
2. Consolidating your debt
3. Settling your debt
4. Filing for bankruptcy
Consider all of your debt relief options before moving forward with a plan.
The federal government and some states offer student loan forgiveness to certain people, especially those who work in public service positions, like teachers or government employees.
If you’re having trouble making monthly payments, make an appointment with a nonprofit credit counselor to discuss your debt relief options. Your counselor may suggest a debt relief option like debt consolidation or debt settlement, or you can work together to create a debt management plan that will help you budget to pay off your debt.