DebtHammer's free guide to debt relief details several options for Arizona residents, including hardship programs, consolidation and other financial resources.

Debt Relief in Arizona

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Arizona is ranked 15 when it comes to the poverty rate. The state’s current poverty rate is 12.8%, which is slightly higher than the national poverty rate of 11.6%. The median household income, meanwhile, was $61,529 at the last census. This is nearly $10,000 below the national household income.

Learn more about your options if you need debt relief and financial assistance.

Are you eligible for debt relief?

If you’re an Arizona resident, DebtHammer may be able to help.

Arizona debt statistics

Here are the most recent debt statistics for Arizona:

  • Average household debt: $60,090 (Source: Federal Reserve Bank of New York)
  • Average student loan debt: $35,396
  • Average credit score: 710
  • Median mortgage payment: $1,071
  • Bankruptcies in 2021: 750
  • Personal income/Annual mean wage: $55,170
  • Child poverty: 15%
  • Unemployment: 3.3%

Debt relief options for Arizona residents

If you’re struggling with debt, here are the best ways to find relief in Arizona.

  • Debt settlement: Debt settlement is the process of negotiating with your creditors to get them to lower how much you owe to less than its original amount. It’s generally done through a debt settlement agency and may require you to pay off the reduced amount in a lump sum.

READ MORE: Best debt settlement companies in your area

  • Debt consolidation loans: A debt consolidation loan lets you combine several debts into one loan with a single monthly payment. It’s best for people with good credit who can get a new loan with a lower interest rate than each individual debt.
  • Debt Management Plan (DMP): Typically offered through nonprofit credit counseling companies, debt management plans are beneficial for people who are struggling with debt. The credit counselor acts as a middleman and works with your creditors to help negotiate better terms or lower monthly payments. These plans usually cost money, but they can help consolidate your monthly payments into one account, which the counselor uses to pay the creditors.
  • DIY plans: With DIY debt relief or settlement, you can negotiate with your creditors to set up a repayment plan or reduce how much you owe. This typically requires good negotiation skills, but it may not always work.
  • Bankruptcy: Filing for bankruptcy is often the last resort when all other options have been exhausted. There are two main types of personal bankruptcy: Chapter 7 and Chapter 13.

Debt settlement resources

Debt settlement involves negotiating with your creditors to reduce the total you owe. In Arizona, virtually all unsecured debts can be settled. This includes:

  • Credit cards
  • Department store cards
  • Personal loans or lines of credit
  • Personal lines of credit
  • Old judgments
  • Student loans in default

You can settle your debts in two ways:

  • Negotiate directly with your creditors
  • Use a professional debt settlement company

READ MORE: Debt settlement pros and cons

If you decide to hire a professional, the Arizona Attorney General’s Office offers the following advice:

  • Debt settlement companies are required to tell you how many months or years it will be before making an offer to each creditor, and they must tell you how much money you need to pay into escrow before they will make an offer to each creditor.
  • Beware of any debt settlement program that touts a “new government program” to bail out personal credit card debt, or promises that you will only pay “pennies on the dollar.”
  • Beware any guarantees that the company will “make your unsecured debt go away” or “stop all debt collection calls and lawsuits.”
  • Do not stop making payments to your creditors without first considering the additional late fees, interest, and damage to your credit that may occur.

Read more tips on state’s website.

Arizona debt settlement companies

Debt resources for Arizonians facing hardship

Arizona has quite a few resources to help residents facing financial difficulties. Some of these resources are offered at a state level, while others are federally funded. Among other things, they can help with:

  • Utility bills
  • Rent payments
  • Child care assistance
  • Reduced-cost healthcare
  • Legal aid (pro bono or low-cost)

Almost half of Americans are struggling to feed their families right now. Arizona has a number of food banks to help ensure your household has nutritious food, located throughout the state. Here are some of the main ones:

For more information, check with the Arizona Food Bank Network.

State programs

Arizona’s Department of Economic Security offers quite a few state-specific hardship programs, including:

  • Short-term crisis program: This program is meant for people who make no more than 125% of the federal poverty guidelines and who have dependent minors at home. It can help with certain things, including utility bills, rent/mortgage payments, and emergency housing. Contact your local agency by phone to apply.
  • Homeless services: Arizona has several programs that help people facing homelessness. This includes emergency shelters and homeless prevention programs. Find help now by calling 211 or by going to the DES website or
  • Low-Income Household Water Assistance Program (LIHWAP): This program helps low-income households by offering up to $3,000 towards their water and wastewater costs. The funds are disbursed directly to the water service provider. For more information, call: (833) 453-2142
  • Low-Income Home Energy Assistance Program (LIHEAP): This program assists low-income households with their home energy costs. The exact amount varies, but most people receive around $1,200 a year. Fill out an application form here.
  • Emergency Rental Assistance Program (ERAP): ERAP provides people renting in Arizona financial aid to help with their rent payments and utility bills. Eligible households can receive around $3,500 a month. For more information about the application process, refer to the DES page on Emergency Rental Assistance.
  • Save Our Home AZ: This program helps people facing foreclosure keep their homes by providing mortgage assistance.
  • The Lawyers Helping Homeowners program: For homeowners who need free legal resources and advice, this program can help. The attorneys involved are typically willing to help with things like loan modification, short sales, and more to help avoid foreclosure.
  • The Arizona Department of Health Services: The Department of Health Services offers many free resources for residents in need. This includes everything from how to find a health screening location to resources on general health (women’s, men’s, children’s, elderly, etc.).
  • The Arizona CoppeRX Card: Also known as the Arizona Rx Card, this card can reduce the cost of generic and brand-name medications.
  • The Arizona Cash Assistance Program: This program is part of the national Temporary Assistance for Needy Families (TANF) program. It provides short-term cash benefits to low-income households, as well as other supportive services, to help families in need.

Debt collection laws

Arizona adheres to the federal guidelines outlined in the Fair Debt Collection Practices Act (FDCPA), which regulates debt collection throughout the U.S. Among other things, these laws prohibit third-party debt collectors from:

  • Using harassment, threats, or abusive tactics to collect a debt.
  • Contacting an individual by phone without identifying themselves and why they are calling.
  • Intentionally misrepresenting themselves as someone they are not to collect a debt.
  • Engaging in unfair tactics to collect money (ex. collecting interest or other fees outside of the debt agreement).
  • Willingly claiming the individual owes a debt they do not.

The FDCPA also regulates how often a debt collector can contact you and in what ways.

Debt collectors in Arizona must also send a validation letter proving that you owe the debt. The letter should also indicate how you can dispute the debt if you believe it is inaccurate.

If you feel like your rights have been violated, contact the Arizona Attorney General’s Office.

Income and employment

During the height of the COVID-19 pandemic, Arizona’s unemployment rate skyrocketed to 13.9% in 2020. Since then, however, it’s been steadily dropping. By July 2022, it was at around 3.3% with 118,742 residents still unemployed. This is slightly lower than the national average, which is currently 3.5%.

In terms of job creation, Arizona ranks 15th with 111,000 new jobs being created as of August this year.

Arizona is an “employment-at-will” state, meaning an employer can terminate an employee without reason (excluding legal reasons). Unfortunately, this can cause a lot of problems, such as decreased job security.

The state also has “right-to-work” laws. This means an employed individual has the right to join a labor union and pay its dues, but an employer cannot force them to do so.

The downside to this is that there are very few employee protections in place. The wages may also be lower than in other states. In fact, employees in a right-to-work state receive about $1,500 less each year than those in other states.

How to apply for unemployment benefits

You can apply for unemployment benefits in Arizona in one of the following ways:

Before applying, make sure you have the following information:

  • Complete mailing address
  • Contact details — full name, email address, phone number, etc.
  • Employment information
  • Government-issued ID
  • Social security number

After completing an application, you’ll receive several documents regarding your benefits, as well as a wage statement and a Certificate of Understanding.

For a step-by-step guide on how to apply, refer to the state’s unemployment insurance benefits process.

Banking and taxes

Arizona’s income tax rate ranges from 2.59% to 4.50%. It also has a state sales tax of 5.60%. However, with local taxes, the total estimated sales tax ranges from 5.60% to 11.20%.

As for banking, 4% of Arizonians don’t have a checking or savings account. Even more residents are underbanked, meaning they have a bank account but also regularly use other financial services like payday lenders and check-cashing services.

Housing market

According to Zillow, an online real estate marketplace, the average Arizona home value is $439,536. This is a 16.8% increase from the previous year. In comparison, the average home value in the U.S. is $356,026.

Around 65.9% of Arizonians are homeowners. The median mortgage payment is around $1,071, while the average rent payment depends on the city. In Phoenix, for example, it’s $1,590.

Another thing to note is that Arizona offers a homestead exemption of $250,000. This exemption lets homeowners protect $250,000 in home equity from creditors.

Retirement in Arizona

The average Arizona resident has saved $364,395 for retirement. In order to live comfortably during retirement, the average Arizonian needs to have at least $1,117,884 set aside.

Average insurance premiums

The average car insurance premium in Arizona is $1,743 for an entire year, or about $145 a month. This is slightly less than the national average, which is currently $1,771 per year.

As for homeowner insurance, the yearly premium is $1,216 for homes valued at about $250,000. It may be higher for more expensive homes.

Payday lending status: Prohibited

Since 2010, Arizona has prohibited payday lenders from operating within the state. For more information, refer to Arizona Payday Loan Laws: The Ultimate Legislative Guide.

Loan terms and debt limits

  • Interest rate (APR): 36.00%
  • Maximum loan term: Depends on the principal balance (ex. 25 months and 15 days for loans up to $1,000). Loans greater than $6,000 have no legal payment term minimums or maximums.
  • Statute of limitations on debt in Arizona: The statute of limitations is 3 years for credit card debt. It’s 6 years on auto loans, mortgages, and medical debts. And it’s 10 years for unpaid taxes.

Help for Veterans

As of 2019, Arizona was home to approximately 488,061 Veterans, many of whom struggle financially today. Arizona’s Department of Veterans’ Services offers resources to help Veterans facing homelessness, unemployment, or other hardships.

Facilities in Arizona

There are three full-service VA hospitals located in Phoenix, Prescott and Tucson.

Looking for a VA office in Arizona? Here are the main ones:

ADVS Headquarters

  • 3839 North 3rd Street Phoenix, AZ 85012
  • (602) 255-3373

Arizona State Veteran Homes

  • 4141 North Silvestre Herrera Way Phoenix, AZ 85012
  • (602) 248-1550
  • 555 East Ajo Way Tucson, AZ 85713
  • (602) 638-2150

(There will also be locations in Yuma and Flagstaff)

Arizona Veterans’ Memorial Cemeteries

  • 1300 S Buffalo Soldier Trail Sierra Vista, AZ 85635
  • (602) 458-7144
  • 14317 Veterans Drive Bellemont, AZ 86015
  • (602) 214-3473
  • 15950 N Luckett Road Marana, AZ 85653
  • (602) 638-4869

Veteran Benefits Counseling

Contact a counselor at 602-535-1215

For current information, check with the Arizona Department of Veterans’ Services.

Employment resources for Veterans

  • CareerOneStop is an all-in-one site with career resources, job advice, and a job search portal
  • offers virtual career fairs for both Veterans and military spouses nationwide
  • Helmets to Hardhats is a nonprofit program that helps Veterans and active service members prepare for a career in construction and transition back into civilian life
  • Hiring Our Heroes helps Veterans, military personnel, and military spouses through hiring events, education, networking, and fellowship programs
  • My Next Move works with Veterans to help them find a civilian career that lets them use their military skills
  • Warriors to Work helps Veterans by matching them with prospective employers, helping them update their resumes and more 

The bottom line

Knowing your options is the first step to improving your financial situation, now and in the future. Arizona residents benefit from federal and state protections against debt collectors. More than that, the state also offers debt relief options and temporary financial hardship programs for those struggling with unmanageable amounts of debt.


How long can a debt be collected in Arizona?

This depends on the type of debt, but the time limit usually caps out at 6 years on written contracts. Some debts have a different time frame, though. For example, taxes are considered “collectible” for up to 10 years. Credit cards, meanwhile, are only collectible for 3 years.

When does the statute of limitations begin in Arizona?

This depends on whether the account is open or closed. For closed accounts, the statute of limitations is generally 6 years starting from the most recent payment date. For open accounts, it typically begins the first time you miss a payment.

Am I responsible for my spouse’s debt if I get divorced in Arizona?

Arizona is considered a Community Property State. This means that any assets earned, as well as any debt gained, during the marriage are split equally between the two parties. If your spouse earned a debt while you were married, you could be responsible for paying it.

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