In a Nutshell

Like the hot deserts intermingled with towering balmy mountains, Arizona is a land of contrasts. With a higher average home value than other U.S. states, Arizona also has a lower median income and more people living in poverty than the rest of the country averages.

In an uncertain economic climate, many living in The Grand Canyon State are having trouble paying bills, buying groceries, and keeping up with the rising costs of inflation. It’s no wonder that credit card debt is reaching new heights as consumers charge more just to make it from paycheck to paycheck.

For many, the time has never been better to pursue the various debt relief options available to Arizona consumers. Read on for a brief guide to each choice, with resources and statistics to help you determine the right option for your financial situation.

Your Options To Get Out of Debt in Arizona

Credit Counseling

Getting sound financial advice and education from a credit counseling organization in Arizona can help you make better choices with your money.

How It Works in Arizona
Arizona consumers who sign up for credit counseling programs are assigned to a certified credit counselor for personalized support and financial education.
Pros
Credit counselors discuss your credit history and offer financial guidance for a low cost.
Cons
Credit counseling doesn’t actually involve paying off debts.
Cost
Credit counseling programs may charge a small fee to enroll or offer free services to low-income Arizona residents.
Stats
Although some Arizona residents choose to manage debt through counseling services, in the past decade, more consumers across the U.S. have chosen debt settlement as a solution, according to the Consumer Financial Protection Bureau.
Resources
The Financial Counseling Association of America offers resources and a directory to help you find credit counseling in your area.

Debt Management

Overcoming large balances through a debt management program (DMP) can give you the structure you need to make regular payments.

How It Works in Arizona
Arizonans can choose to enroll in a DMP with a private or nonprofit organization operating in the state. After you start paying into an account, the organization uses those funds to make monthly payments to your creditors on your behalf.
Pros
Credit counseling organizations offering DMPs can help lower interest rates and negotiate waived fees on your outstanding balances.
Cons
Once you enroll in a program, you’ll have to close out most, if not all, of your credit card accounts to curb excess spending while trying to pay off debt.
Cost
Debt management programs typically charge a small initial set-up fee plus monthly service fees ranging from $25-$35 per account.
Stats
Debt management plans help consumers overcome huge debt balances. The average total consumer debt in Arizona is $115,963 per resident.
Resources
Read more to understand how debt management works and what’s involved in a DMP.

Debt Consolidation

Consolidating debt offers a DIY solution for Grand Canyon State residents wanting to reduce interest rates and tackle small to medium-sized balances.

How It Works in Arizona
Arizona residents can choose to open a zero-interest balance transfer credit card or take out a debt consolidation loan from a traditional bank, credit union, or online lender.
A consolidation loan essentially turns several bills into one, ideally at a lower fixed interest rate than the combined weighted average rate you’re paying on all of your bills. And, with a fixed repayment term, you’ll know exactly when you’ll have your debt paid off by making all of your payments on time.
Pros
Using a zero-interest credit card allows you to catch up on payments and pay down the principal on your debt without the added interest charges and fees.
Consolidation loans simplify your bills down to a single monthly payment you’ll start making towards the new loan balance.
Cons
With a balance transfer card, if you don’t pay off your transferred balance within the zero-interest introductory period (typically 12-18 months), you’ll pay high interest charges on any leftover balance (typically 22% to 29% or higher, on average, as of this article’s publication).
To secure a debt consolidation loan at a lower interest rate, you’ll need a fair to good FICO credit score (usually between 580 and 660).
Cost
Interest rates can soar to nearly 30% after the initial low or no-interest promotional period expires, leaving you stuck with higher interest charges again.
A consolidation loan will cost the total amount of all your balances plus any interest charges, which is why it’s crucial to secure a loan at a lower rate than your current interest payments to make it worthwhile.
Stats
In Arizona, the average credit score is 713, proving that many residents are likely to qualify for relatively low interest rates.
Resources
Learn more about debt consolidation and determine if it can help you find debt relief.

Debt Settlement

Accelerating the debt payoff process is possible even with large balances when you choose debt settlement.

How It Works in Arizona
Arizona residents can contact creditors on their own or work with a debt settlement company to negotiate a reduced lump-sum payoff amount for their debts.
Pros
Debt settlement allows you to pay off large debts at a faster pace for less than what you actually owe.
Cons
Because you pause payments to your creditors until you build up enough savings to pay the lump sum you negotiated with your creditors, debt settlement negatively impacts your credit scores with all three major credit reporting bureaus for several years.
Cost
Debt settlement companies charge fees based on the total debt you enroll in a program. They typically charge fees ranging from 15-25% of your total enrolled debt.
Stats
In 2020 alone, nearly 40,000 Arizonans enrolled in a debt settlement program of some type, either on their own or with a debt settlement company.
Resources
Read more to learn about debt settlement through companies like TurboDebt.

Bankruptcy

Paying and absolving your debts through Arizona’s legal system is a final option for debt relief.

How It Works in Arizona
Arizona consumers typically file for Chapter 7 or Chapter 13 through the bankruptcy court within their jurisdiction.
Pros
A court-ordered repayment plan organizes what you can pay back to creditors and may absolve some of your remaining debts. You’ll also get a fresh start financially.
Cons
Courts may order you to sell off assets to pay creditors and mandate certain financial choices in terms of restructuring and repaying your debts.
Bankruptcy also negatively impacts your credit score and history for up to 10 years, making it much harder to obtain credit in the future.
Cost
Bankruptcy costs can range between $750 and $4,000, depending on legal fees. You’ll also pay filing and administrative fees to the bankruptcy court.
We recommend that you consult with an experienced, licensed bankruptcy attorney to determine whether bankruptcy is the right decision for you.
Stats
A total of 9,599 Arizonans filed for bankruptcy in 2023.
Resources
Learn more about what happens to your financial life after declaring bankruptcy.

What You Need To Know About Debt in the State of Arizona

Statute of Limitations on Debt Collections in Arizona

Arizona’s Statute of Limitations limits the amount of time creditors can pursue legal action when consumers fail to pay their debts. While debts don’t disappear after the Statute of Limitations has been reached, it does give you the chance to pursue other options like debt relief to repay creditors.

Type of Debt Agreement Length of Time Collectible
Written Contracts3 years
Promissory Notes6 years
Open-Ended Agreements6 years
Oral Agreements3 years
Medical Debt5 years

Student Loan Forgiveness in Arizona

Students at Arizona’s public universities who plan to become teachers can apply for no-cost tuition and loan forgiveness programs through Arizona Teachers Academy.

This program covers tuition for students who agree to teach in Arizona schools after graduation. The benefit provided by Arizona Teachers Academy is also available to qualifying students attending private colleges.

Arizonans who have served in government positions may also qualify for student and other loan forgiveness through the Public Service Loan Forgiveness Program.

Medical Debt Forgiveness in Arizona

Brad Reichert, a debt expert and the founder and managing director of Reichert Asset Management LLC, explains an exciting new opportunity for qualifying Arizona residents to secure medical debt forgiveness.

“Many Arizonans struggle under the weight of large medical bills incurred through no fault of their own. However, on March 4th, 2024, Arizona Governor Katie Hobbs was proud to announce ‘Affordable Arizona: Tackling Medical Debt for Working Families,’ which is intended to become an investment in the health and prosperity of everyday Arizonans,” Reichert shares.

“Using up to $30 million in American Rescue Plan Act funds, the State of Arizona will partner with the non-profit organization, Undue Medical Debt, to purchase and forgive billions of dollars in medical debt held by medical providers for up to one million Arizonans,” Reichert says.

Reichert also shares one of the program’s downsides: “Unfortunately, there is no way for private citizens of Arizona to apply for this program. The charity, Undue Medical Debt, performs an analysis and identifies qualifying accounts.”

“Selected accounts will have their debt automatically canceled, and beneficiaries will be notified without needing to take any action. However, the State of Arizona can only cancel these medical debts if hospitals and health systems sell or donate their medical debt portfolios as part of this program,” Reichert adds.

Resources for Financial Assistance in Arizona

Although the state of Arizona doesn’t offer government assistance for debt relief, they do provide several programs to help residents facing financial hardship. Here are some of the main programs Arizonans can access in times of need:

Get Professional Help Paying Off Your Debt

Whether you’re struggling to pay bills or caught in a cycle of debt because of high interest payments, seeking help from a professional organization may be exactly what you need to regain your financial footing.

TurboDebt offers customized debt relief plans for Arizona residents stuck under the heavy weight of unsecured debts like credit card balances, medical bills, and personal loan payments.

With over 15,000 5-star TurboDebt reviews on Trustpilot and Google, our proven record of excellent customer service shows our commitment to helping Arizona consumers overcome debt. In 2023 alone, we enrolled more than $16 million in debts from Grand Canyon State residents, saving them an average of 53% of their total debt before fees.

How TurboDebt Helped Arizona Residents With Debt Relief Last Year

It only takes a few minutes to start your journey to financial freedom. Contact the TurboDebt team today to see if you qualify for a personalized debt relief plan.