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A Guide to Arizona Debt Collection Law

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In a Nutshell

Do you live in Arizona? Are you behind on your credit card or other consumer debt payments? The Fair Debt Collection Practices Act dictates many of Arizona’s laws in this area. But there are some key differences between the FDCPA and the laws of the state of Arizona. Here we will examine the laws of Arizona pertaining to debt collection, where they differ from the FDCPA, and why this issue should matter to you.

Written by Mark P. Cussen, CMFC
Updated December 12, 2021

Do you live in Arizona? Are you behind on your credit card or other consumer debt payments? If so, then you need to know what your rights are as a delinquent borrower. Whether you are behind in your car payments, credit card payments, or other types of debt, there are rules set forth by Congress that determine when and how creditors can contact you. The Fair Debt Collection Practices Act dictates many of Arizona’s laws in this area. But there are some key differences between the FDCPA and the laws of the state of Arizona. Here we will examine the laws of Arizona pertaining to debt collection, where they differ from the FDCPA, and why this issue should matter to you. 

Debt Collection in Arizona

The full version of the FDCPA can be found in Section 1692 of Title 15 of the United States Code (15 USC § 1692). For the most part, Arizona law mirrors those statutes. Debt collectors and debt collection agencies face restrictions concerning when and how often they can call you and what they are allowed to say to you when trying to collect a debt. However, these restrictions do not prevent them from trying to get delinquent borrowers to pay what they can. 

Fair Debt Collection Practices Act

While bill collectors can pursue legal avenues of debt collection, there are several things that the FDCPA prohibits them from doing. Debt collectors can make reasonable attempts to obtain a borrower’s contact information. Once they reach a borrower, they can then inform the borrower of their attempt to collect the debt. But they cannot be deceptive or misleading regarding who they are and what they can do. The FDCPA places limits on the tactics that debt collectors can use to collect their debts. The FDCPA ensures that borrowers have a bill of rights that protects them. It should also be noted that this legislation only applies to consumer debt and not to business debts. 

How the FDCPA Protects Debtors

The FDCPA protects borrowers in a number of ways. While it does not prevent creditors from going after borrowers, it does dictate exactly how creditors are permitted to pursue collection of debts. Creditors do not have carte blanche authority to go after borrowers in any way that they please; there are rules governing their tactics that they must adhere to. 

For the most part, Arizona’s debt collection laws mirror those of the FDCPA. Creditors are still bound by the same set of rules that creditors in most other states are bound to. Also, most creditors are restricted by the same prohibitions that the FDCPA law stipulates. Creditors in Arizona are still barred from calling late at night or too early in the morning. And they must still identify themselves when they call or face possible sanctions from the Federal Trade Commission. Those who disobey these rules may leave themselves open to lawsuits by borrowers. Borrowers could sue for the amount of the debt in question, plus punitive damages, late fees, and other costs associated with the debt. 

Most Common Violations of the FDCPA

Under the FDCPA, the following tactics are illegal:

  • Using abusive or profane language - A debt collector may place phone calls to or email the borrower, but they cannot swear or insult the borrower personally in any way. While they can be firm, they must still be polite and professional when they contact them. 

  • Threatening a borrower, a borrower’s real estate or other property, or their reputation - Any type of threat along these lines is forbidden. Any type of threat about anything other than the debt in question is strictly illegal. 

  • Threatening to seize all of your property -  The debt collector can say that they may sue the borrower to recover the debt in question, but they cannot sue them for everything that they own.

  • Harassing, annoying (unreasonably), or abusing - Creditors are legally prohibited from doing anything designed specifically to unreasonably annoy the borrower. They cannot call borrowers in the middle of the night, show up at their doorstep, or bombard them with phone calls during the day. The FDCPA does not specify exactly how many phone calls are too many, but if a collection agency calls a borrower every 15 minutes every day, this is most likely a violation of FDCPA rules. 

  • Threatening to take the matter public - Debt collectors are strictly prohibited from publicizing the status of any of their cases in any capacity. If they send a borrower correspondence via regular mail, they cannot indicate on the outside of the envelope that it is an attempt to collect a debt. They are also prohibited from using postcards for the same reason. All debt collection actions are strictly private in nature, and no one else can know about them except for the credit reporting agencies. But borrowers should pull their credit report from each of the three major reporting agencies at least once a year to make sure that there are no inaccuracies being reported. 

  • Calling at unreasonable hours - Debt collectors and collection agencies cannot call borrowers before 8 a.m. or after 9 p.m. local time, unless the borrower has specifically given them permission to do so. They also cannot contact borrowers while they are working unless the borrower gives them permission. If they do so, then that is a violation of FDCPA rules. 

  • Using other prohibited avenues of communication - Debt collectors and collection agencies can call a borrower’s family members or other contacts to verify the borrower’s contact information, but they have to identify themselves and must say that they intend to collect on a debt. And if the third party asks, the debt collector is required to give the name of their employer. If an attorney is representing the borrower, then the debt collector can only talk to the attorney and not the borrower directly. But they can contact the borrower if the attorney has not responded to their calls within a reasonable period of time. 

  • Engaging in deceptive or otherwise unfair practices - The FDCPA contains a list of practices that debt collectors cannot use in their attempts to collect a debt. One of these practices is lying; a debt collector cannot tell or imply to a borrower that they are an attorney or governmental representative if they aren’t. Debt collectors also cannot withhold information from the borrower about who they work for or who they themselves are. They must also be honest about the total amount of debt that is owed. Collectors likewise cannot threaten a borrower with actions that they have no intention of following through on, such as taking the borrower to court after the statute of limitations has expired. 

  • Acting as false creditors - There are some debt collection agencies that claim that someone owes them a sum of money, when in fact, this is not the case at all. “Debtors” who believe this is the case can request a validation notice from the creditor. In most cases, the debt collector will not respond. 

How Arizona Debt Collection Laws Are Different From the FDCPA

One of the key ways that Arizona’s Fair Debt Collection laws differ from the FDCPA is that Arizona requires all creditors to carry a license to collect debts within the state. Other rules governing Arizona creditors include a law that says a debt collector has five days after first contacting a debtor to send them a written notice telling them:

  • The amount of the debt

  • The name of the creditor to whom the debtor owes the debt

  • A notice telling the debtor that they have 30 days from the date they received the notice to dispute the debt. They also have the right to receive a verification of the debt within 30 days of filing the dispute

Unlike the FDCPA, Arizona’s debt collection laws are criminal in nature. This means that any debt collector or collection agency that violates Arizona’s laws is committing a Class 1 misdemeanor. A debtor cannot legally sue a collection agency if it violates Arizona state law. Instead, the debtor must report the violation to the county or city attorney’s office. However, the debtor may still sue for monetary damages under federal law (the FDCPA) if a violation of this law has been committed. The principals of debt collection agencies (those who own them, run them, etc.) found guilty of violating Arizona’s collections laws can face jail time, fines, loss of licensure, and years of probation. 

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Arizona’s Statute of Limitations and Foreclosure

Every state in America has its own statutes of limitation. This statute dictates the amount of time that a creditor has to collect a debt. Once the limit is reached, the debt becomes uncollectible. In Arizona, the statute of limitations for credit card debt is three years. The statute for mortgages and medical debts is six years. The statute for car loans is four years. Unpaid state taxes have a statute of 10 years. If your debt is older than its respective statute, then you don’t have to pay it anymore. 

Foreclosure happens when a homeowner cannot make their mortgage payments. When this happens, the lender evicts the homeowner and sells the property in an attempt to recoup their loan proceeds. So, if you are behind by several mortgage payments, then this may be a scenario that you are facing right now. But lenders may be prohibited from suing borrowers for their deficiency if their property is foreclosed upon. 

Despite the limitations that debt collectors are subject to in Arizona, they still have several legitimate avenues that they can use to collect their debts. Wage garnishments, property liens, bank levies, repossessions, and foreclosures are all ways that debt collectors can ensure that they get their money back. They just can’t be deceptive or misleading when taking these measures. The statutes of limitations for these debt collection methods are the same as those described above. 

Wage Garnishment

Wage garnishment occurs when a creditor forcibly obtains a portion of the borrower’s income in order to recover a debt. In Arizona, debt collectors can garnish up to 25% of the borrower’s disposable earnings. 

Lien on Real Property

Another common type of legal action is to forcibly and legally recoup a borrower’s debt by placing a lien on the borrower’s personal property, such as their house. When the borrower sells their house, a portion of the proceeds will automatically go to the debt collector as repayment. Or the property may not be sold until the lien has been paid in many cases. And if the lienholder does permit the sale, then the buyer assumes responsibility for the lien. Property liens in Arizona can last for up to 10 years. And a new law that will go into effect on January 1, 2022, will allow creditors to retroactively place liens on the properties of those who have judgment liens filed against them. It won’t matter where they live in the state--be it  Phoenix or Tuscon. 

Account Levy

An account levy is another common method used to forcibly withdraw money out of the borrower’s bank account. This can happen with either a single seizure (payment to the creditor) or a series of seizures/payments until the debt has been repaid. Filing for bankruptcy can stop a levy, but this comes with its own set of issues that must be considered. 

Let’s Summarize...

Debt collectors in Arizona must adhere to federal law and state laws in the course of pursuing their debts. They can face criminal penalties if they break those rules. But there are still several legitimate avenues that they can use to get their money back. Liens, levies, and garnishments are all tools that collectors have at their disposal to do their jobs. Consult with an attorney for legal advice regarding debt relief and what you can do to protect yourself and your property from creditors. If you cannot afford an attorney, then you can contact the Arizona attorney general or attorney general’s office for more information.

Written By:

Mark P. Cussen, CMFC


Mark has over 25 years of experience in the financial industry, and has worked with investments, insurance and mortgages as well as income tax preparation and comprehensive financial planning. His writing work includes insurance and securities training manuals and educational art... read more about Mark P. Cussen, CMFC

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