Arizona Debt Collection Laws: The 10% Garnishment Cap, Statute of Limitations, and Repossession

Arizona quietly became one of the most debtor-protective states in the country in December 2022, and a large share of what the internet says about garnishment here is now out of date. Before any of it matters, though, the process truth comes first: a collector on ordinary consumer debt must sue you, win a judgment, and obtain a writ of garnishment before your employer withholds a cent. Most garnishments happen because the person sued never answered and a default judgment was entered. Answering the summons is the single highest-value thing you can do.

Wage Garnishment in Arizona: The 10% Rule

ARS 33-1131(B), as amended by the voter-approved Predatory Debt Collection Protection Act (Proposition 209), sets the cap for ordinary judgment creditors: the garnishable amount for any workweek may not exceed the lesser of

1. 10 percent of your disposable earnings for that week, or
2. the amount by which your weekly disposable earnings exceed 60 times the applicable minimum hourly wage, using the highest of the federal, state, or local minimum wage in effect where you work.

Disposable earnings means what remains after legally required withholdings such as taxes. Because Arizona's minimum wage is well above the federal one, the 60-times floor protects a substantial weekly amount before the 10 percent test even applies, and workers in cities with higher local minimum wages get a higher floor still.

On a showing of extreme economic hardship, established by clear and convincing evidence, the court may reduce the garnishment to 5 percent of disposable earnings. Arizona has no separate head-of-household exemption; the hardship reduction is the functional equivalent, and it must be requested from the court.

Support obligations run on a different track: for court-ordered support, ARS 33-1131(C) exempts one half of disposable earnings, mirroring the much higher federal support limits.

Ignore the 25% figure

A companion procedural statute, ARS 12-1598.10, still recites the pre-2022 percentages because it was never conformed to Prop 209. That stale text does not govern. In Silence v. Betts (Ariz. Ct. App. 2024), the court held that wages earned on or after December 5, 2022 are garnished at a maximum of 10 percent, and Arizona court garnishment instructions, including the Maricopa County Justice Courts' earnings garnishment guide, compute at 10 percent with the 5 percent hardship reduction. If a collector or an employer is applying 25 percent, the withholding is almost certainly unlawful and worth challenging immediately.

Firing protection

Only the federal rule was located for Arizona: 15 U.S.C. 1674 bars discharging an employee because of garnishment for any one debt. We found no Arizona statute extending protection to multiple garnishments.

Bank Account Protections

ARS 33-1126(A)(9) exempts $5,000 held in a single account at any one financial institution as its statutory base. The statute directs an annual inflation adjustment each January 1 beginning in 2024, and a $5,600 figure for 2026 is well corroborated by secondary sources, including an NCLC bank-garnishment-statutes appendix, tracking a $5,000-base-2024 to roughly $5,400-2025 to roughly $5,600-2026 CPI-adjustment progression; azcourts.gov's official table itself could not be confirmed live this session, so treat $5,600 as reported and secondary-sourced, and check the current adjusted amount published by the Arizona courts before relying on a precise number. The exemption protects one account, so consolidating funds matters.

On top of that, directly deposited federal benefits such as Social Security carry the automatic federal shield of 31 CFR Part 212: the bank itself must protect the last two months of benefit deposits, with no filing required. Amounts above the protected figures can be frozen, and exemptions for them must be claimed through the court promptly after notice.

Statute of Limitations on Debt in Arizona

Arizona is one of the few states that answers the credit card question by statute: ARS 12-548(A)(2) expressly gives credit card debt a 6-year period, so there is no fight over whether a card is a written contract or an open account. The same statute contains a choice-of-law clause providing that if another jurisdiction's limitations period conflicts, Arizona's 12-548 applies.

For open accounts, no item is barred so long as any item of the account was incurred within three years before suit, which can extend the practical window on a running account.

Revival: writing only

Under ARS 12-508, an acknowledgment takes a case out of the statute of limitations only if it is in writing and signed by the party to be charged. The statute does not make partial payment a revival method on its own, and whether Arizona courts treat a payment as an implied acknowledgment is not settled enough to state as a rule, so the safe assumption cuts both ways: do not sign anything acknowledging an old debt without advice, and do not assume a payment is risk-free either.

Time-barred is not erased. A collector may still ask you to pay, but under Regulation F, 12 CFR 1006.26, a debt collector must not sue or threaten to sue on time-barred debt. Credit reporting runs its own roughly seven-year clock regardless of the limitations period.

Medical Debt: Arizona's Extra Protections

Proposition 209 was aimed substantially at medical debt, and two of its pieces matter here. First, the 10 percent garnishment cap applies to medical judgments the same as other consumer debts. Second, ARS 44-1201 caps interest on medical debt at the lesser of a rate tied to the one-year Treasury yield or 3 percent per year, which applies to judgments on medical debt and dramatically slows the growth of a medical judgment compared to ordinary judgment interest.

What Debt Collectors Can and Cannot Do

The federal FDCPA applies fully: third-party collectors cannot misrepresent the amount or legal status of a debt or threaten action they cannot legally take, 15 U.S.C. 1692e, and Regulation F governs contact frequency and validation notices. Arizona also licenses collection agencies through the Department of Insurance and Financial Institutions, which accepts complaints, as do the CFPB and the Arizona Attorney General.

Car Repossession Rules

Arizona's version of the UCC self-help rule, ARS 47-9609, allows a secured lender to take the vehicle after default without a court order, provided it proceeds without a breach of the peace. The statute does not define breach of the peace; as a practical matter, entering a locked garage or continuing over your in-person objection are the classic danger zones, and how Arizona courts draw the line is fact-specific.

We located no Arizona statute requiring advance notice or a cure period before repossession of a financed vehicle. After repossession, the sale must be commercially reasonable and any deficiency claim is subject to the UCC's calculation rules. Servicemembers whose contracts predate military service are protected by the federal SCRA, 50 U.S.C. 3952, which requires a court order for repossession.

If You Are Being Garnished or Sued in Arizona

1. Answer the lawsuit. Default judgments are the engine of garnishment. An answer forces the collector to prove its claim and its timeliness.
2. Check the percentage. If a garnishment computes at 25 percent, it is applying pre-Prop-209 law. Object through the court that issued the writ and point to ARS 33-1131(B).
3. Request the hardship reduction if you need it. The court can cut the garnishment to 5 percent of disposable earnings on clear and convincing evidence of extreme economic hardship.
4. Raise the statute of limitations. Card debt older than six years from default, or oral and open-account debt older than three, is likely time-barred, and the defense is waived if not raised.
5. Protect your bank account. Know that one account at one institution carries the $5,000-base exemption, and claim exemptions immediately when a levy notice arrives.
6. Consider bankruptcy for unpayable debt. The automatic stay stops garnishment at filing, and for multiple judgments it is often the only complete answer.

Information last verified on 2026-08-12. This article has not yet been reviewed by a licensed lawyer.

Related Resources

• Debt Collection Laws by State
• How to Stop Wage Garnishment
• Statute of Limitations on Debt
• Can Social Security Be Garnished?
• Arizona Statute of Limitations
• Arizona Bankruptcy Laws

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Last updated: 2026-08-12.