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ARIZONA DEBT RELIEF - FACTS, PROGRAMS, AND SOLUTIONS

Arizona Debt Relief - Facts, Programs, and Solutions

BY Richard BarringtonDecember 30, 2024

Are you an Arizona resident struggling with too much debt? You’re not alone—in more ways than one.

Did you know that the credit card debt balance per capita in Arizona was $4,340, slightly higher than the national average of $4,040.(Based on the NY Fed Reserve Household and Credit Report for Q3 2024 and includes a sample of the population with credit reports).

Fortunately, you are also not alone in the sense that there is help available. Debt relief professionals have plenty of experience solving problems just like yours. They can guide you toward a solution based on your needs and situation.

This can make debt more manageable in the near term, with the long-term goal of helping you rebuild your credit record.

What Is Debt Relief?

In broad terms, debt relief means changing the terms of your debt to make it more affordable. This can involve:

Giving you more time to pay
Lowering your interest rate
Canceling some or all of your debt

The last point is often what people mean when they use the phrase “debt relief.” It is a negotiated process, also sometimes called debt settlement.

However, debt relief can also refer to other programs, such as debt modification, credit counseling, or bankruptcy.

It’s helpful to understand all these options so you can decide which is the best fit for your situation.

Average credit card debt in Arizona - debt relief seekers

Credit card debt in Arizona impacts many across all age groups. We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during November 2024. Here are the key statistics:

Average credit card debt for all debt relief seekers	Percent holding Credit Card Debt	Average Debt for all debt relief seekers and carrying credit card balance
$12,903	88.5%	$14,581
▲1.3% MoM)	▲ 0.7% MoM	▲ 0.6% MoM

This snapshot shows that the average credit card debt for Arizoners seeking debt relief rose slightly month-over-month (MoM), with the percentage of debt holders and the average debt for balance carriers experiencing a modest increase.

Breakdown of average credit card debt by age group

This breakdown shows how credit card debt affects each age group in New York, with older adults generally carrying higher balances and a greater proportion holding debt.

Age Group	Percent holding Credit Card Debt	Average Debt for Balance Carriers
18-25	83%	$11,035
26-35	85%	$14,015
36-50	91%	$18,036
51-65	91%	$17,780
65+	92%	$18,500

Arizona Debt Relief Programs: How do They Work?

Debt relief is not a one-size-fits-all solution. The right approach depends on your credit history, how much you owe, your income, and what kinds of savings or other assets you have.

Understanding how various debt relief programs in Arizona work can help find the right fit for your situation. Here are the details of the main options.

Debt settlement: A powerful solution for Arizona residents

Debt settlement is a negotiated process to have creditors accept less than the full amount you owe.

You can negotiate this yourself, or have a professional debt relief firm like Freedom Debt Relief handle it for you.

Debt settlement can often reduce debt by 25% to 50%. This can help you get debt-free and rebuild credit faster than approaches that simply reduce your payments but still require you to pay the full amount you owe.

Settling a debt may have a negative impact on your credit score. However, people considering debt settlement tend to already have damaged credit. Settling the debt can allow you to start getting back on your financial feet, and that’s how you’ll be in the best position to build a healthy credit profile.

In some cases, there are tax consequences when a debt is forgiven. However, not everyone pays taxes on forgiven debt. If you are insolvent when the debt is settled, meaning your debts were worth more than your assets, then you won’t have to pay federal income taxes on the settled portion. Consult a qualified tax professional about your situation to know for sure.

Is debt consolidation the right choice?

Some people prefer debt consolidation to debt settlement. This is often the case for people with less-severe debt. It also depends on having good-enough credit to get a debt consolidation loan.

Debt consolidation means borrowing money to pay off multiple other debts. This can simplify your monthly payments. It works best if you can lower your interest rate with the new loan. Debt consolidation could also reduce monthly payments by giving you a longer time to pay—though stretching out a debt could you more interest in the long run.

If your credit is still in pretty good shape, debt consolidation is an option to help you manage and deal with yoru debts.

Debt settlement may be a better solution if you can’t afford to fully repay your debts without at least some degree of debt forgiveness. Debt settlement only works with unsecured debt. Credit card debt is a common example of unsecured debt. Streamlining your payments with debt consolidation may not be enough to make your debts affordable.

You may also have to consider debt settlement if you can’t qualify for a debt consolidation loan.

Arizona statute of limitations

Arizona’s debt laws may influence how you approach debt relief.

There’s a law in every state called the statute of limitations, which restricts the amount of time a creditor can try to collect a debt from you. If they haven’t started the collection process by the time the statute of limitations expires, they cannot legally collect the debt.

Statutes of limitations on debt collection vary from state to state. Also, the statute of limitations in Arizona depends on what kind of debt is involved. Here are the time limits on pursuing different types of debt in Arizona:

Type of debt	Time period
Auto loan debt with repossession	4 years
Medical debt	6 years
State tax debt	10 years
Written contracts, including most credit cards	6 years

The statute of limitations could save you from being pursued for an old debt. If a lot of time has passed since you’ve heard anything about a debt, you might want to see if the statute of limitations has passed.

Be careful. There are things that could restart the clock on a statute of limitations. If a debt collector contacts you, ask for proof that they own the debt, you owe it, and the details are correct. Don’t acknowledge the debt, make a partial payment, or offer to pay.

Hardship programs for Arizona residents

If you are in financial trouble, there are a variety of resources you can turn to for help. Here are some options for finding out about hardship programs and other financial assistance for Arizona residents:

The Centers for Medicaid and Medicare Services is a good starting point for information about these federal programs. Medicaid provides financial assistance for medical costs to low-income households. Medicare provides healthcare coverage for senior citizens.
The Arizona Department of Economic Security can provide you with information about a variety of financial assistance programs. These include help with medical costs and with affording rent and child care.
The US Department of Justice has a search tool to help you find approved credit counseling agencies in Arizona.
The Arizona Department of Housing offers information on programs for rental assistance and eviction prevention.
AZLawHelp.org provides information on reduced-fee legal services for qualifying Arizona residents.
Freedom Debt Relief offers a variety of services that can help Arizona residents cope with their debt.

Find Your Debt Relief Solution

So what’s the right debt relief solution for you? Find out with a free debt relief evaluation from Freedom Debt Relief.

It doesn’t cost you anything to find out what personalized debt solutions may be available to you. On the other hand, the more you delay, the more it can cost you. Putting off finding debt relief can allow expenses to pile up, and cause you more stress.