Arizona Collection Laws

What are my rights and liabilities regarding debt in Arizona?

I have many debts that I cannot pay. Can my wages be garnished or my home be seized under Arizona law?

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Bill's Answer
(22 Votes) Team



  • Arizona's mortgage recourse laws are a bit tricky.
  • Wage garnishment, liens, and account levies are legal in Arizona.
  • Arizona is a community property state, and creditors can reach one spouse's assets for the other's debt liability.

In Arizona, you can have your wages garnished and your property could be at risk, if a creditor has a judgment against you. In Arizona, a creditor has several legal means for collecting on a debt.

If an Arizona court grants a creditor a judgment against you, then the creditor has the legal right to demand a wage garnishment, a levy on the your bank accounts, and a lien on the your property. Which of these tools the judgment-creditor will use depends on the circumstances. We discuss each of these remedies below.

Arizona Wage Garnishment

Wage garnishment is the most common method judgment-creditors use to enforce judgments. A judgment-creditor sends legal documents to your employer and requires it to withhold a certain amount of your wages each pay period and send that to the judgment-creditor.

n most states, creditors are allowed to garnish between 10% and 25% of your wages, with the percentage allowed being determined by each state. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law. See the Wage Garnishment article to learn more.

In Arizona, wage garnishment is allowed under Arizona Title 12, Chapter 9, Article 4.1 12-1598. If the judgment-creditor is aware of your place of employment, it may seek wage garnishment.

The maximum you can be garnished for a consumer debt in Arizona is 25%, the same as under federal law. The garnishment applies to 25% of the your net, take home pay (your gross pay less certain required deductions). A calculation, that takes 25% of disposable income and minimum wage into consideration, determines the correct garnishment amount (see Title 12, Chapter 9, Article 4.1 12-1598.16 for the exact calculation. Garnishment can occur only you have received a 10-day’s notice.

However, under Arizona Title 12, Chapter 5.1, Article 2 A.R.S. § 12-592, periodic installments for future damages for loss of earnings or loss of support for beneficiaries of a judgment entered in a wrongful death action are exempt from garnishment, attachment, execution and any other process or claim to the extent wages or earnings are exempt under any applicable law. Periodic installments for all other future damages are exempt under garnishment, attachment, execution and any other process or claim except to the extent they may be assigned pursuant to section 12-591.

Garnishment is allowed for child support under Arizona Title 33, Chapter 8, Article 2 33-1131. Definition; wages; salary; compensation.

Levy Bank Accounts

A levy means that the creditor has the right to take money in your bank account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state’s laws to find if a bank account can be levied. Some states call levy attachment or garnishment.

In Arizona, levy for family support is allowed under Arizona Title 25, Chapter 5, Article 1 25-521. If there is a court-ordered judgment or if the obligor is in arrears in an amount equal to twelve months of support, the department may issue a levy and collect the amount owed by the obligor by levy on all property and rights to property not exempt under federal or state law.

Arizona levy laws are also found in Title 23, Chapter 4, Article 5 23-752, and 23-755. What Arizona calls its levy law covers what other states consider garnishment. Personal property and wages can be seized under Arizona Title 23, Chapter 4, Article 5.

If you reside in another state, see the Account Levy resource to learn more about the general rules for this remedy.


A lien is an encumbrance — a claim — on a property. For example, if your own a home, a creditor with a judgment has the right to place a lien on your home. That means if you try to sell or refinance your home, the creditor can require that you pay it off or you transaction will be stopped. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent you from selling or refinancing until the debtor can pay off the judgment.

Under Arizona Title 33, Chapter 7, Article 5 A.R.S. § 33-964, a judgment shall become a lien for a period of five years from the date it is given, on all real property of the judgment debtor except real property exempt from execution, including homestead property, in the county in which the judgment is recorded, whether the property is then owned by you or is later acquired. A judgment lien for support, as defined in section 25-500, remains in effect until satisfied or lifted.

If you reside in another state, see the Liens & How to Resolve Them article to learn more.

Arizona Statutes of Limitations

Each state has is own statute of limitations rules for debt. Arizona law regarding consumer accounts is found in Title 12, Chapter 5, Article 3. The statute of limitations for oral contracts is 3 years (A.R.S. § 12-543), written contracts is 6 years (A.R.S. § 12-546), and credit cards is 6 years (A.R.S. § 12-548). For credit cards, A.R.S. § 12-548 specifically carves out exceptions where, in some cases, a shorter statute of limitations may apply. (The statute of limitations for credit cards was 3 years prior to 2011.)

Arizona Title 47 contains three references to statutes of limitations relating to property:

  • Default Under a Lease Contract, must be commenced within four years after the cause of action accrued. See Chapter 2A, Article 5 A.R.S. § 47-2A506.
  • Breach of any Contract for Sale, must be commenced within four years after the cause of action has accrued. See Chapter 2, Article 7 A.R.S. § 47-2725.
  • Taxpayer’s obligations for any tax, interest or penalty required to be collected by the department for any tax period are extinguished, if not previously satisfied, six years after the amount of tax determined to be due becomes final unless extenuating circumstances apply. See Title 42, Chapter 2, Article 2 A.R.S. § 42-2066.

ollection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

Regarding judgments, a judgment-creditor has 5 years to enforce a judgment unless the judgment is renewed. See A.R.S. § 12-1551(B). A judgment may be renewed by filing an action to enforce the judgment or by filing an affidavit with the court within 90 days before the expiration of the 5-year period. See § 12-1611 and A.R.S. § 12-1612.

Arizona Foreclosure

Arizona foreclosure laws are found in Title 33, Chapter 6, Article 2.

Under Arizona law, a lender may be prevented from suing the borrower for the deficiency following a foreclosure. However, Arizona’s anti-deficiency laws are tricky. Under Arizona A.R.S. § 33-814, a homeowner is liable for a deficiency judgment if they have not resided in their home for six consecutive months. A deficiency on a purchase-money mortgage is not allowed on residential property if a single one-family or single two-family dwelling that is on 2.5 acres or less (33-814G).

The Arizona anti-deficiency laws apply to second mortgages and deeds of trust if they are purchase money loans (Baker v. Gardner, 160 Ariz. at 104, 770 P.2d; and Ross Realty Co. v. First Citizens Bank & Trust, 296 N.C. 366, 250 S.E.2d 271, 275 (1979); and Nydam v. Crawford, 181 Ariz. 101, 887 P.2d 631 (App. 1994)). A deficiency is allowed if the value of the house has declined because the homeowner has committed waste (33-814A). Consult with an Arizona attorney with experience in property law to understand your rights and liabilities in your situation.

Community Property & Arizona Law

Arizona is one of the 10 community property states. Regarding debts, this means if a married Arizona debtor individually signs a contract at the time he or she is married, both the debtor and spouse have liability to repay the debt, with a few exceptions.

Analysis of spousal debt is complicated. According to the University of Arizona James E. Rogers College of Law, "All property owned by each spouse before marriage is the separate property of that spouse. (A.R.S. § 25-213). The statutes also provide that any inheritance and income earned from rents, issues, and profits of separate property during marriage are separate property. Case law has established certain other acquisitions as separate property as well. These are:

  • "Purchases made with separate funds or property
  • "Professional degrees and license
  • "Damages or benefits for personal injuries, and
  • "Certain federal retirement benefits such as social security"

Upon divorce, property be divided approximately equally (A.R.S. § 25-318).

Creditors may not use the separate property of a spouse to satisfy a separate debt of the other spouse. Community property is available to creditors to pay the separate debt of a spouse if the debt was incurred before the marriage and after September 1, 1973, but only to the extent of that spouse’s contribution to the community property that would have been such spouse’s separate property if single (A.R.S. § 25-215).

Arizona Collection Agency Law

Arizona adds protections not found in the federal Fair Debt Collection Practices Act. Arizona law requires collection agencies:

  • Be licensed in Arizona and provide a bond
  • " openly, fairly and honestly..." in their business

Arizona collection agent licensees may not:

  • "Engage in any unfair or misleading practices"
  • Use any "oppressive, vindictive or illegal" collection methods
  • Send any written communication that imitates any form of judicial process from a court, government entity, or lawyer
  • Represent the debt collector practices law or maintains a legal department unless the collector is, in fact, also licensed to practice law
  • Attempt to collect any collection fee, attorney's fee, court cost or expenses the debtor is not legally obligated to pay
  • Misrepresent the amount of the existing debt or falsely stating that if the debt is not paid, the debtor will incur additional attorney fees, investigation fees, service fees, or any other additional charge
  • Give the impression the debt collector represents the state
  • Say the Arizona government or any state agency endorses its activities

Violation of these laws is a class 1 misdemeanor. If you have been victimized by a collection agency, file a report of the violation with your local city or county district attorney or prosecutor. Also consult with a lawyer to discuss filing a civil lawsuit against the collection agent. Some lawyers take these cases on a contingency basis, which means no out-of-pocket costs to you. These limits and prohibitions can be found in A.R.S. § 32-1001 to 32-1057.


Consult with an Arizona attorney experienced in civil litigation to get precise answers to your questions about liens, levies, garnishment, foreclosure, and community property law in Arizona.

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  • JF
    Jan, 2013
    My wife is trying to pay a judgment that is showing up on one of her credit reports. When we called the original creditor they transferred us to what I assume to be the Judgment Creditor. They claim they won't settle the judgment for less than $3,500. The judgment listed on her credit report is $1,400. When we call to ask why it is so high they tell us it is for legal fees and interest that is somewhere around 28%. What can we do in this situation, and can they legally charge us interest or try to collect for more than the judgment listed in the credit file?
    0 Votes

    • BA
      Jan, 2013
      First, just because a collection account or judgment appears on a credit report does not mean the debt is owed. There are three main credit reporting agencies (CRAs) in the US, and many smaller ones. A credit reporting agency is a specialized publisher. Think of a CRA as a type of newspaper or Web site — the information may be accurate or it may not be. Your first task is to learn if a judgment even exists, its amount, and whether the plaintiff (the party that filed the action) followed all of your state's civil procedure rules. If it didn't, then you can file a motion to vacate the judgment.

      Second, many states allow judgment-creditors to charge interest on a judgment. The state will set the maximum amount. Your second task is to learn how much is allowed in your state. Do not take the judgment-creditor's word for what the maximum may be.

      Third, realize that when it comes to debt collection, everything is subject to negotiation. Scrape together $750 or so and offer the judgment-creditor that amount as a settlement.

      However, before you start making offers, take steps 1 and 2 to learn if the debt is even a real judgment, and if so, whether the mystery-fee add-ons are allowable under your state's laws. Consult with a lawyer who has consumer law experience for assistance.
      0 Votes

    • RW
      Mar, 2013
      In Arizona the maximum allowed post judgment interest rate is 10% Judgments over five years old and NOT renewed are unenforceable. If it's over 5yrs from the date it was obtained they cannot legally force you to pay. The problem becomes the credit report. It can legally stay on there for 7-10 years.
      0 Votes

  • CH
    Apr, 2012
    I defaulted on my school loan of $11,000. The creditor (through a judgment) has been receiving payments (garnishment) for 4 1/2 years. I have $9,000 but now the creditor said the $9,000 was fees and interest and I can't be released from the garnishment until I pay $11,000 principle. Can they do this?
    0 Votes

  • MP
    Mar, 2012
    My Father received a court judgement on $6,500 credit card debt by a law firm. He acquired the debt from health issues some years ago and his only income is social security and a very small pension. As I understand it wage garnishment is not allowed on those incomes but can the court order a garnishment of his bank account? He has no savings and no money left over each month after bills and expenses. Also, my Father and I co-own the home we live in; can the court order a lien on our house? He has no car and no real assets besides some furniture. He is an 86 year old veteran. We live in Arizona. Thank you.
    0 Votes

    • BA
      Mar, 2012
      In most states, a judgment-creditor for credit card debt has three remedies:
      • Wage garnishment
      • Account levy
      • Lien on property

      Let us look at each for a retired person who owns real property.

      Federal law prevents garnishment of Social Security benefits. Social Security benefits deposited into an account are protected, too, if the account contains only Social Security funds. Ask your bank or credit union to place a notation on the account that it contains money from the Social Security Administration. Most states protect pensions from garnishment.

      A levy is possible for account containing non-Social Security funds, or accounts that contain funds from Social Security and another source.

      A judgment-creditor can obtain a lien on property titled in the judgment-debtor's name.

      Here, you mentioned your father is on the title to the home. Therefore, the property is at risk for having a lien is filed against it. A lien will encumber the property, making the lien an issue when you want to refinance or sell the property.

      0 Votes

  • CL
    Feb, 2012
    We are looking to do a refi next month under HARP 2.0. Currently, I am pretty sure we have a non-recourse loan here in Arizona. What I would like to know is if we will still have a non-recourse loan once we refi or if it will become a recourse loan. Does that status change whether we are living in the home or renting it?
    0 Votes

    • BA
      Feb, 2012
      It is quite probable that if your current loan falls under the anti-deficiency laws, and it is a purchase money loan, then the new HARP loan will also qualify as a non-recourse loan. However, since the Arizona anti-deficiency laws are complicated, and open to some interpretation, I recommend that you speak with an Arizona lawyer. You want to be 100% certain about the recourse/non-recourse issue, before you refinance.
      0 Votes

  • EH
    Feb, 2012
    We bought our first house about 4 years ago, and the payment was to high and could no longer afford it. We lived in the house for a year. I tried to get it lowered but was not successfull. We had to walk away from the house. They recently started garnishinmg my paychecks and took my irs refund. Can they do that on your first house?
    0 Votes

    • BA
      Feb, 2012
      As the article stated, anti-deficiency laws can be tricky. Consult with an Arizona attorney with experience in property law to understand your rights and liabilities in your situation.
      0 Votes