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Arizona Collection Laws

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UpdatedMay 28, 2024
Key Takeaways:
  • 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.

Your Rights and Liabilities For Debt in Arizona

If you owe debt and reside in Arizona, it’s important to understand your rights and liabilities. It is even more important if a creditor threatens to file a lawsuit against you.

A lender, collection agent or law firm that owns a collection account is a creditor. Arizona law gives creditors several means of collecting delinquent debt from you.

Before a creditor may use these legal tools in Arizona, the creditor must go to court to receive a judgment against you. See the article Served Summons and Complaint to learn more about this process, and how to fight a lawsuit.

A court will hold a hearing after a creditor files a lawsuit. A hearing may result in a judgment awarded to the creditor. A judgment is a court’s declaration the creditor has the legal right to demand:

The laws calls these remedies. A creditor granted a judgment is called a judgment-creditor. Which tool a judgment-creditor may use depends on the circumstances and Arizona law. We discuss each of these remedies below. In Arizona, the following laws are found under Arizona Title 12 - Courts and Civil Proceedings unless specified.

Learn How to Handle a Call to Collect a Debt

Receiving collection calls is unpleasant, whether from the original creditor or from collection agency. Call 800-998-7497 to speak with a Money Coach and discuss what to say and not to say in a phone call with a debt collector, and also what kind of financial plan you need to avoid this happening again.

Arizona Wage Garnishment Rules

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

Learn the Limits of a Wage Garnishment

In most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. 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.

Arizona Bank Account Levy

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.

Arizona Lien

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. § 12-548), 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.
Take Action Against Abusive Debt Collectors

Collection 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. 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. See the article Arizona Community Property to learn more about this issue.

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.

If you cannot afford a lawyer, contact Community Legal Services or another Arizona pro bono program to find no- or low-cost legal services.

Dealing with debt

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Auto loan debt was $1.62 trillion and credit card was $1.12 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in New Mexico, 32% have any kind of debt in collections and the median debt in collections is $1651. Medical debt is common and 16% have that in collections. The median medical debt in collections is $700.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.



NNahashon H Whata, Nov, 2022
Bank under the Federal Reserve freezes bank account for the amount of $99,999,999.00 or until 2099. This is a Judgement won for a QDRO that was not completed. I was given notice by my Union that I could withdraw all my funds. The same letter was sent to the defense.And 2 years past as I signed and approved each of the defenses QDROs but he simply would not get a certified copy from the court when told by the Admin who approved them and wanted them back with the court's signature. The ERISA 18 month rule was in place, but my account with the Union was frozen until I said enough is enough and withdrew all the funds. He now has over $40,000 in attorney fees for show of cause actions and sends my bank a copy of the judgement and orders it is frozen. I never was called by the bank nor did I get anything from the defense about this freeze, I found out about it when my card did not work 2 weeks into the freeze. My pension is what I get on this account. This has caused more problems with payments not being paid and the bank fees. The money is still in my account and it has been 4 weeks. I filed the exemption with the court and nothing and now the defense has filed for a warrant for arrest until money has been paid.This is money owed from a QDRO had to be paid to his client. But he would not turn the QDROover to the court to be signed so the money would have been released to his client. The QDRO was never certified and sent back to the Union therefore they released all funds back to me.
GGregory burchett, Aug, 2021

I have a judgement for unpaid wages. Can I do a bank levie .i can't ask to garnish his wage he is the owner an I'm sure a 0.000 garnishment would show .ive been trying to get my 7,000 dollars for three years he disappeared , but have found via Facebook he is back.i need to expedite this action.with the pandemic I need my money's an it caused a great deal of hardship an suffering b Due to his willfull non payment.

ssharon, Feb, 2021

When it comes to statute of limitations on a debt does this mean that it expires ONLY if they have not been sending notice letters or it just means they have not yet collected it? For example if a HOA has tried to collect for now 7 years does the statute of limitations run out or because they are trying to collect it cannot be considered past the limitations.

ddelpha smith, Jan, 2021


JJeff A, Dec, 2020

Our 2nd mortgage went into default and was charged off on 08/29/2011. The last payment made was on 01/25/2011. No judgement was filed by the lender and I do not see any evidence of the delinquency on my credit report. Does this mean the debt has been resolved with "now" no negative impact on my credit report?

GGinger, Oct, 2020

I had a credit card that was opened in 2007. The account was closed by the creditor in 2011. Apparently, it has gone through 6-7 debt collectors now and I have a firm called me stating they are going to file with the courts for a judgment against me. Can they do this since the original debt is over 9 yrs old? Apparently, this collection/law company, Hawthorn management group, is now suing me for something that has been closed for 9 yrs and gone through the wringer 6-7 times. I didn't even remember this debt, it is not on any of my credit reports. I reside in Arizona and was wondering what the laws are on this type of situation when it comes to a debt collector that has bought the debit so many times over. They are also planning on charging me court fees which are more than the debt.

DDaniel Cohen, Oct, 2020

Ginger, here is some information I am sharing with the understanding that I am not providing you legal advice.

The statute of limitations on credit card debt in Arizona is three years. That makes it very likely that the SOL on the debt has expired. SOL issues can be tricky, which is why I said "very likely." It is possible that the debt is still within the SOL, even after all this time, because you took some action that stopped the clock from running, you took some action that restarted the clock, or some term in the agreement would make the SOL in another jurisdiction apply. My gut feeling is that the collector is trying to scare you into paying. If they send you written notice, you can send them a debt validation letter

From what you wrote, it sounds like Hawthorn is telling you that they are going to sue you, but have not done so yet. I am guessing that they are acting as if they will to panic you into paying. If you are sued, respond to the paperwork you receive and go to court. Present to the court the statute of limitations on debt as your affirmative defense. 

I don't know if there Hawthorn has violated the law by what they said to you, but a good way to check is to contact an attorney that handles violations of the FDCPA (Fair Debt Collection Practices Act). These kind of attorneys don't charge you a fee but will take the case if they feel they can win and get money from the debt collector. Do a search online for "FDCPA attorney" and the name of the city in which you live.

Please report back on how things go for you!

LLorie Meeks, Oct, 2020

So Rushmore Loans sold my debt to 2 companies, they somehow got my dads number which I never gave to them BTW, they called stating that im am now going to legal services and that im going to be served legal documents at the residence im at, which I never disclosed but they somehow got it, im not at the address I used to live at due to medical hardship and no money, but this so called company said that since today was the only day that they could work out payments with me if I could not pay or workout a commitment of monthly payments then im being sued, which the debt is under $500 but apparently they want go out of their busy day and spend over $1000 in court fees to serve me a judgment and sue..what are my rights? Im in Arizona but the debt was in another state..I heard here in Arizona you can serve jail time for debts, these debts are over 3 years old..I don't have any money since im pretty much homeless and jobless..suggestions? Nice comments please and no judgments, everyone is suffering and dealing with problems..

DDaniel Cohen, Oct, 2020

Lorie, I am not a lawyer, so any information I share is not to be taken as legal advice.

It isn't clear to me who received the call in which they threatened legal papers being served, whether it was you or your dad. It sounds to me that they may have be trying to scare you into paying. Given that you are pretty much homeless and jobless, you can't pay the debt nor commit to a payment plan. Therefore, respond to any written communication with a debt validation letter. Go to court and respond to any paperwork if you are summoned. Speak with an attorney who specializes in Fair Debt Collection Practices Act violations. It won't cost you. The lawyers who handle FDCPA cases will take your case if the debt collector violated the law, such as making threats against you that are improper, and collect their fee from the debt collector if they take your case and win. Do a search for "FDCPA attorney" and the name if the city in whch you live.'

Please report back on how things go.