Arizona is less friendly to debtors than many other states and offers creditors a relatively long time to sue you. However, because unsecured debts aren't backed by any property that a creditor can repossess, you have several options for fighting debt lawsuits, and creditors have limited options for collecting.
Limitations on Lawsuits
Arizona doesn't establish a specific statute of limitations for unsecured debts. Instead, it sets the statute at three years for oral contracts and six years for written ones. Most credit cards and loans are written contracts. Your credit card company can't sue you after this time has lapsed, but if you make a payment or sign a new agreement, that action will restart the clock, making it possible to sue you many years after you first opened the account.
Defenses Against Debt
If you're not properly served with a lawsuit, you don't have to show up for court and the suit will be dismissed. In Arizona, a creditor can sue you by leaving a suit with you or a person over the age of 14 at your home or business. Your creditor must show specific evidence that you owe the debt, such as a signed contract, a previous history of paying the debt or proof that you own the possessions purchased with the credit card. If the creditor can't show proof, you don't necessarily have to offer evidence of your own.
Garnishing Your Wages
Wage garnishment is a process that allows a creditor to obtain a judgment in court and then take a portion of your wages directly from your employer. Although some states establish their own limitations on garnishments, Arizona doesn't. Instead, creditors must follow federal law by getting a judgment first. They can then only garnish up to the lesser of 25 percent of your disposable income -- the amount that doesn't go directly to basic expenses -- or all earnings that exceed 30 times the federal minimum wage.
You have a right to sue your creditor to get a judge to rule that you either don't owe the debt or owe less than the creditor says you do. You can also sue debt collection agencies under the Fair Debt Collection Practices Act. This federal law prohibits collectors from threatening or harassing you, from refusing to verify that you actually owe the debt, from repeatedly calling you or calling you late at night and from threatening to take actions that they do not intend to take or are legally prohibited from taking.
- Serve Now: Arizona Rules of Civil Procedure
- Skiba Law Group, PLC: They Can't Garnish Your Wages -- Yet!
- Nolo: Negotiating With Collectors on Unsecured Debts
- Cornell University Law School Legal Information Institute: Fair Debt Collection Practices Act
- Nolo: Arizona Wage Garnishment Laws
- McCarthy Law PLC: Credit Card Debt Statute of Limitations
Van Thompson is an attorney and writer. A former martial arts instructor, he holds bachelor's degrees in music and computer science from Westchester University, and a juris doctor from Georgia State University. He is the recipient of numerous writing awards, including a 2009 CALI Legal Writing Award.