Debt collection laws in Arizona

Here are your rights in Arizona if debt collectors come knocking

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Debt collection happens when you fall behind on your payments toward credit card bills and other loans. Some creditors hire their own bill collectors to collect amounts owed, while others sell their debts to debt collection agencies that do the dirty work for them.

Fortunately, a comprehensive federal debt collection law limits what bill collectors can get away with across the United States, and there are state laws that extend even more protections to consumers who live in certain parts of the country, such as in Arizona.

Key insights

  • At the federal level, the Fair Debt Collection Practices Act (FDCPA) protects consumers from harassment, threats and round-the-clock calls from bill collectors.
  • Arizona has a state debt collection law that is a criminal statute, meaning individual debt collectors can face legal consequences for their actions.
  • If your rights have been violated, you may be able to sue debt collectors for damages under the FDCPA.

Federal debt collection laws

The Fair Debt Collection Practices Act (FDCPA) is a federal debt collection law that affords all Americans certain rights when unpaid debts are being pursued by bill collectors.

This act prohibits debt collectors from using deceptive or abusive debt collection practices, such as contacting you at odd hours, calling you repeatedly or making false threats regarding legal actions they plan to take. Debt collectors are also barred from revealing the existence of unpaid debts to other parties, both on social media and through direct forms of communication.

According to the Consumer Financial Protection Bureau (CFPB), the FDCPA requires debt collectors to contact your attorney instead of reaching out to you personally if you have legal representation already in place.

Also, note that the FDCPA lets you stop all contact from debt collectors by informing them in writing that you do not want to receive communications any longer. If the debt collector continues its communications, you can sue them under the FDCPA and receive coverage of your legal fees as well as damages.

» MORE: How to handle bill collectors

Arizona debt collection laws

The state of Arizona has a criminal statute that governs debt collectors, and this statute builds upon protections offered through the FDCPA.

Debt collection practices

In the state, debt collectors and collection agencies are prohibited from using any of the following debt collection practices:

  • Calling you before 8 a.m. or after 9 p.m. without permission
  • Contacting you instead of your attorney if you have legal representation
  • Calling you at work if the agency knows your employer prohibits this contact
  • Contacting friends and families more than a single time, or for a reason other than getting your contact information
  • Trying to collect a debt when they know you dispute it
  • Using threatening language
  • Threatening to have you arrested, have your property seized or your wages garnished
  • Making false, deceptive or misleading statements while trying to collect on a debt
  • Using profane or obscene language
  • Failing to identify themselves on the phone, or being dishonest about their identity
  • Disclosing (or threatening to disclose) debts owed to most third parties

Statute of limitations

Like other states, Arizona has several statutes of limitations that limit how long a debt can be pursued through the legal system. These limitations vary based on the type of debt being collected.

Note that these time limits set a cap on how long a collection agency can sue you for repayment of a debt, but that doesn't mean you no longer owe the money.

Arizona’s statutes of limitations for debt are as follows:

  • Medical debt: 6 years
  • Written contracts (including most credit card debt): 6 years
  • Auto loan debt after repossession: 4 years
  • State tax debt: 10 years

Licensing and registration

Arizona requires debt collectors to be licensed to do their jobs in the state. This license is "required of any person who directly or indirectly solicits claims for collection or collects claims owed, due or asserted to be owed or due to a third party," according to the Arizona Department of Insurance and Financial Institutions.

Consumer rights

When Arizona residents receive a written notice about their debts owed, they have the legal right to dispute the debt in writing within 30 days of that notice.

Once you dispute a debt in writing, the debt collector is required to send proof of the debt to you. This could be a copy of the original bill owed, a formal statement listing the original debt from the original creditor or both.

Arizona residents also have the right to sue debt collectors in the state if they have violated your rights, although you only have one year from the date of the violation to file a lawsuit.

If you win in court after suing for FDCPA violations, you can receive reimbursement for lost wages or related medical bills. Other damages of up to $1,000, plus attorney fees and court costs, can also be awarded.

Enforcement and penalties

While all U.S. residents can sue debt collectors who violate their legal protections under the FDCPA, violating Arizona's debt collection law is a class 1 misdemeanor. This means that legal consequences can come into play for individual debt collectors who break the law, although the penalties can vary.

If you feel your rights have been violated by a debt collector, you can file a complaint with the Arizona Attorney General's office. You can also report Arizona debt collectors to the Federal Trade Commission or the CFPB.

Examples of debt collection violations in Arizona

In June 2023, the CFPB took legal action against a company called Phoenix Financial Services that resulted in the agency being forced to pay $1.675 million to the CFPB’s victims relief fund. This legal action was the result of the agency using illegal practices to attempt to collect on unpaid medical debts, even at times when consumers had already disputed the debts in question.

“With medical debt looming over so many American families, we are taking action against companies seeking to illegally profit off patients,” said the CFPB director, Rohit Chopra, in a press release. “Given widespread inaccuracies in medical billing and credit reporting, the CFPB will be working to ensure that patients are not coerced into paying debts that they do not owe.”

» MORE: How to get out of debt

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    Can you be sued for unpaid debts in Arizona?

    Arizona debt collectors can sue you for unpaid debts in the state until the statute of limitations for the type of debt is passed. For credit card debt, the statute of limitations runs out after six years once an account has gone unpaid.

    Can Arizona debt collectors garnish your wages?

    If you are sued for unpaid debts in the state and a judgment is obtained against you, you may have your wages garnished or have withdrawals taken from your bank accounts. You may even have a lien placed against property you own.

    Bottom line

    Having to endure phone calls and visits from debt collectors is never fun, but both federal and state laws can provide you with some protections. The FDCPA even lets you stop communications from debt collectors altogether, after which they must cease contact even though you will still owe the debt.

    If you're struggling with debt in Arizona, some debt collection attorneys and credit counseling agencies can offer smart advice. Whatever you do, don't let unpaid debts go ignored, or else you might end up in court and face wage garnishment, seizure of cash in your bank account and other financial consequences.

    Article sources

    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:

    1. Federal Trade Commission, "Fair Debt Collection Practices Act." Accessed Nov. 28, 2023.
    2. Federal Trade Commission, "Fair Debt Collection Practices Act." Accessed Nov. 28, 2023.
    3. Consumer Financial Protection Bureau, "What laws limit what debt collectors can say or do?" Accessed Nov. 28, 2023.
    4. Consumer Financial Protection Bureau, "How do I get a debt collector to stop calling or contacting me?" Accessed Nov. 28, 2023.
    5. Arizona Attorney General Kris Mayes, "Collections and Debt Settlement." Accessed Nov. 28, 2023.
    6. Arizona Judicial Branch, "Consumer Debt." Accessed Nov. 28, 2023.
    7. Arizona Judicial Branch, "Statute of Limitations." Accessed Nov. 28, 2023.
    8. Arizona Department of Insurance and Financial Institutions, "Collection Agencies." Accessed Nov. 28, 2023.
    9. JW Surety Bonds, "Arizona Collection Agency License Guide." Accessed Nov. 28, 2023.
    10. Consumer Financial Protection Bureau, "Notice of Validation for Debts." Accessed Nov. 28, 2023.
    11. Federal Trade Commission, "Debt Collection FAQ." Accessed Nov. 28, 2023.
    12. Israel & Gerity, PLLC, "How Do I Stop Debt Collector Harassment in Phoenix?" Accessed Nov. 28, 2023.
    13. Consumer Financial Protection Bureau, “CFPB Takes Action Against Phoenix Financial Services for Illegal Medical Debt Collection and Credit Reporting Practices.” Accessed Nov. 28, 2023.
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