Turbo Takeaways
- Many Arizonans are turning to structured debt solutions to help manage high-interest debt.
- Effective debt relief programs like credit counseling and debt settlement can reduce balances, lower interest rates, or rebuild financial footing.
- The right relief option depends on your income, credit profile, and how quickly you want to tackle unsecured debt.
Your Options To Get Out of Debt in Arizona
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 residents of the Grand Canyon State are struggling to pay bills, buy groceries, and keep 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 debt relief programs available to Arizona consumers. Read on for a brief guide to each option, with resources and statistics to help you determine the right option for your financial situation.
Credit Counseling
How It Works
Getting sound financial advice and education from a credit counseling organization in Arizona can help you make better choices with your money.
Arizona consumers who sign up for credit counseling programs are assigned to a certified credit advisor for personalized support and financial education.
Pros
- Low-cost access to financial guidance tailored to your situation
- Helps review credit history and build better money habits
- Connects Arizonans to nonprofit educational resources
Cons
- Credit counseling doesn’t actually involve paying off debts
- Progress depends heavily on following the counselor’s guidance
- Limited impact if you need faster or deeper balance reduction
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.
Resources
The Financial Counseling Association of America offers resources and a directory to help you find credit counseling in your area.
Debt Management
How It Works
Overcoming large balances through a debt management program (DMP) can give you the structure you need to make regular payments.
Arizonans can decide 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
- Bundles payments into one structured monthly plan
- Can reduce interest rates and waive certain fees
- Provides long-term support through a counseling agency
Cons
- Requires closing most credit cards to avoid new debt
- Monthly fees apply for each account in the plan
- Takes years to complete and doesn’t reduce principal
Cost
Debt management programs typically charge a small initial set-up fee plus monthly service fees ranging from $25 to $35 per account.
Stats
- The average total consumer debt in Arizona is $115,963 per resident. Debt management plans help consumers oversee debt balances.
Resources
Read more to understand how debt management works and what’s involved in a DMP.
Debt Consolidation
How It Works
Consolidating debt offers a DIY solution for Grand Canyon State residents wanting to reduce interest rates and tackle small to medium-sized balances.
Arizona residents can choose to open a zero-interest balance transfer credit card or take out a consolidation loan from a traditional bank, credit union, or online lender.
A debt 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
- Turns multiple bills into one organized monthly payment
- Zero-interest balance transfers offer interest-free breathing room
- Consolidation loans give a fixed payoff timeline
Cons
- Can cost more overall if repayment drags out
- High APRs return if a balance lasts past the promo period
- Good credit is needed to secure lower loan rates
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. And that 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 703, proving that many residents are likely to qualify for relatively low-interest rates.
Resources
Learn more about debt consolidation programs and determine if they can help you find debt relief.
Debt Settlement
How It Works
Accelerating the debt payoff process is possible even with large balances when you choose debt settlement.
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
- Can significantly reduce what you owe
- Speeds up payoff when balances are too large for DIY methods
- Ideal for unsecured debts such as credit cards, personal loans, and medical bills
Cons
- Not all creditors agree to negotiate
- Settlement fees apply once debts are successfully reduced
- Requires stopping payments, which could hurt your credit history
Cost
Debt settlement companies charge fees based on the total debt you enroll in a program. They typically charge fees ranging from 15% to 25% of your total enrolled debt.
Stats
- In 2023 alone, over 33,000 Arizonans enrolled in a debt settlement program (PDF) of some type, either on their own or with a debt settlement company.
Resources
Read more to learn about debt settlement programs through companies like TurboDebt®.
Bankruptcy
How It Works
Filing for bankruptcy to pay and absolve your debts through Arizona’s legal system is a final option for debt relief.
Arizona consumers typically file for Chapter 7 or Chapter 13 through the bankruptcy court within their jurisdiction.
Pros
- Provides a legal path to dismissing or restructuring debts
- Offers a structured, fresh start financially
Cons
- May require selling assets depending on your case
- Long-term credit consequences lasting up to 10 years
- Filing and attorney costs can be significant
Cost
Bankruptcy costs can range from $750 to $4,000, depending on the legal fees. You’ll also pay filing and administrative fees to the bankruptcy court.
It's highly recommended that you consult with an experienced, licensed bankruptcy attorney to determine whether bankruptcy is the right decision for you.
Stats
- A total of 10,861 Arizonans filed for bankruptcy (PDF) in 2024.
Resources
Learn more about what happens to your financial life after declaring bankruptcy.
What You Need To Know About Debt in 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 Contracts | 3 years |
| Promissory Notes | 6 years |
| Open-Ended Agreements | 6 years |
| Oral Agreements | 3 years |
| Medical Debt | 5 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 doesn’t offer government assistance for debt relief, they do provide several programs to help Arizona residents facing financial hardship. Here are some of the main programs Arizonans can access in times of need:
- Cash Assistance: Arizona’s Cash Assistance Program offers immediate monetary help to families with children.
- Food Support: Arizona administers the federal Supplemental Nutrition Assistance Program (SNAP) at the state level to help residents afford fresh food and other groceries. It also provides help through the Emergency Food Assistance Program (TEFAP).
- Child Care Assistance: Arizona’s Department of Economic Security offers child care resources for parents in need of assistance.
- Medical Benefits: The Grand Canyon State offers Medicaid through the Arizona Health Care Cost Containment System (AHCCCS).
- Stimulus Checks: Currently, there is no stimulus check planned for Arizona.
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 residents of the Grand Canyon stuck under the heavy weight of unsecured debts. We have helped thousands of Arizona clients save an average of 54% of their total debt (before fees).
With over 20,000 5-star TurboDebt reviews on Trustpilot and Google, our proven record of excellent customer service shows our commitment to helping Arizona consumers overcome debt.
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.