Debt Relief
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Arizona Debt Relief Options

Updated on:
Content was accurate at the time of publication.

In Arizona, federal and state laws protect residents from predatory, unfair and deceptive practices when it comes to debt relief and collections. Arizona debt collection laws require that collection agencies be licensed, and the state criminally penalizes companies that violate its debt collection statutes.

Arizona debt statistics

The average FICO Score in Arizona was 712 in 2022, according to Experian. Arizona residents carry an average of $40,260 in non-mortgage debt.

Arizona debt

TypeAverage debtRank out of 50 states
Credit card debt$7,21325
Student loan debt$36,68216
Mortgage debt$115,18112

Sources: LendingTree (credit cards and mortgage), Federal Reserve Bank of New York Consumer Credit Panel and Equifax (student loans)

Arizona debt relief options

If you find yourself overwhelmed by debt, you can explore the debt relief programs listed below. (One option not available to Arizonans is payday loans, which are illegal in Arizona due to their predatory nature.)

Credit counseling

Credit counseling is a free or low-cost option for borrowers who need help managing their debt. Credit counselors are personal finance experts that can help you build a budget and manage your debt.

If you’re eligible, your credit counselor may enroll you in a debt management plan (DMP). This is a type of repayment plan in which your credit counselor can negotiate with your creditors on your behalf to dismiss fees or lower your interest. With a DMP, you can typically pay off your debts within three to five years.

The U.S. Department of Justice offers a list of approved credit counseling agencies in Arizona that offer everything from financial education to debt management programs. The National Foundation for Credit Counseling (NFCC) can also help you connect with a credit counselor free of charge.

Debt consolidation

Arizona residents can roll various debts into a single account in what’s known as debt consolidation. This can be done with debt consolidation loans and balance transfer credit cards.

  • Debt consolidation loans are a type of personal loan where you can package multiple debts together into one loan, ideally with a lower annual percentage rate (APR) than what you were previously paying. These loans come with fixed APR and minimum monthly payments. Debt consolidation loans are typically unsecured, meaning you won’t have to put down collateral, but lenders will lean more heavily on your credit score and history before approving you.
  • Balance transfer credit cards often come with 0% intro APR. With this route, you can move multiple debts onto one credit card. If you qualify for a card with 0% intro APR, you won’t have to worry about paying interest on your balance when you first open the card. However, once the promotional period ends, you’ll begin paying interest.

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Debt settlement

Debt settlement is a relief option you can take if your bills are long past due. During this process, you can negotiate with your creditors to settle your debts for less than what you originally owe.

Debt settlement companies, such as Freedom Debt Relief, can help you settle your debts. However, debt settlement companies may charge large fees and there’s no guarantee that they’ll come to an agreement with your creditor. Instead, you can negotiate with your creditors yourself at no cost.

Keep in mind that settled debts can stay on your credit report for up to seven years and can negatively affect your credit score. You may also have to pay taxes on any settled debts.


If you’ve exhausted all other options and still find yourself unable to keep up with your debt, you may consider bankruptcy as a last resort. This can be a way for you to eliminate debt and get a fresh start with your credit.

  • Chapter 7 bankruptcy is the most common form of bankruptcy among consumers, and borrowers have to pass a means test to be eligible. Chapter 7 discharges all eligible debts, but the downside is that you may have to sell some of your assets, such as vehicles or other valuable property, to repay your creditors. Chapter 7 can stay on your credit report for up to 10 years.
  • Chapter 13 bankruptcy allows you to keep your property, but you’ll have to repay at least some of your debts in a three to five year payment plan. This type of bankruptcy is sometimes referred to as the “wage earner’s plan” and it’s typically offered to those who don’t qualify for Chapter 7 and have a steady income. Chapter 13 can stay on your credit report for up to seven years.

If you’re considering bankruptcy, you can seek legal counsel through the National Association of Consumer Bankruptcy Attorneys. The Arizona District of the U.S. Bankruptcy Court also provides information on filing for bankruptcy without an attorney.

Arizona debt collection laws

If you’re unable to repay your debt, your original creditor may sell your account to a third-party debt collection agency. These debt collectors purchase delinquent debts for cheap and make money by getting you to repay your debt.

Debt collectors can be charged with a class one misdemeanor if they violate Arizona’s debt collection laws.

According to Arizona legislation, debt collectors must follow these requirements:

  • Be licensed
  • Can’t attempt to collect collection, attorney or court fees
  • Can’t practice any “unfair or misleading” collection efforts
  • Can’t send any messages that imitate legal processes, are ambiguous or imply that the borrower’s debts could be increased by lawyer, investigation and service fees
  • Can’t threaten to sell borrower’s account to another individual or organization
  • Can’t give the impression that the agency practices law or represents the state government

Since Arizona’s debt collection laws are criminal statutes, this means that consumers can’t sue a collection agency for breaking state legislation. However, you may file a federal lawsuit under the Fair Debt Collection Practices Act (FDCPA).

If you come across a debt collection agency you believe is violating Arizona debt collection laws, you can file a report online or contact the Attorney General’s Office with the following phone numbers based on where you live:

  • Phoenix: 602-542-5763
  • Tucson: 520-628-6504
  • Other parts of the state: 800-352-8431

Understanding Arizona’s statute of limitations

Before responding to a debt collector or agreeing to pay a long overdue bill, be sure to check Arizona’s statute of limitations on debt. This is the limited amount of time that creditors have to pursue legal action against you if you don’t repay your debts.

In Arizona, the statute of limitations depends on the type of debt you have. For closed accounts, creditors have six years from the last payment date before the statute of limitation ends. When it comes to open accounts (like credit cards), the statute of limitations runs six years after the first missed payment, whether there is an acceleration clause or not.

After the statute of limitations on the debt passes, your debt is considered time-barred and your creditor can’t file a lawsuit to get you to repay. However, this doesn’t mean your debt is discharged, and your creditor can still contact you about the outstanding debts.

Arizona statute of limitations on debt

Type of debtYears
Medical debt6 years
Written contractions (including most credit card debt)6 years
Auto loan debt (if there was repossession)4 years
State tax debt10 years

Most debt in Arizona has a statute of limitations of six years, with the exception of auto loans and state tax debts. This means that after six years — whether that’s after the last payment date or missed payment — your creditor won’t be able to file a lawsuit against you to collect payment.

Arizona residents have a variety of debt relief options including credit counseling, debt consolidation, debt settlement and bankruptcy. Your best options for debt relief depend on your credit score and your ability to afford your debts (also known as your debt-to-income ratio).

Arizona offers several student loan forgiveness programs to those who work public service positions. For instance, the Arizona Department of Education Teacher Loan Forgiveness program clears loan amounts from $5,000 to $17,500 for residents with qualifying teacher service.