Arizona restricts the number of years creditors have to collect unpaid auto loans. Such restrictions are mandated to protect debtors from worrying about old debt. According to Arizona debt collection laws, creditors must start the clock ticking on debt as soon as a payment is received.
Identification
Arizona allows creditors to collect unpaid auto loans up to six years from the last date of activity on the loan. Compared with other states, Arizona's statute of limitations is neither the longest nor shortest in the country. As of May 2011, Washington D.C. and 15 states mandate shorter statutes of limitations. The remaining states are either equal to or exceed Arizona's statute of limitations.
Enforcement of Auto Loans
A creditor seeking a civil judgment for an unpaid auto loan must file a lawsuit in a state court. The creditor must provide an original written contract and show proof of payment to establish a breach of contract took place. State courts only enforce auto loan contracts that are valid, meaning the last date of payment must have occurred no later than six years before.
Considerations
Months before the statute of limitations runs out on a written contract, creditors may contact you demanding immediate payment of the delinquent amount. Because creditors seeking a civil judgment against a debtor must file in the debtor's home state, creditors are prone to settle debt or agree to installment payments to avoid involving the court system. Demand written notification of the terms and conditions of any arrangement to which you agree.
Consequences
Failing to repay an auto loan hurts your consumer credit score. Under the Fair Credit Reporting Act, creditors and lenders are allowed to report payment history to the three major credit bureaus --- TransUnion, Experian and Equifax --- for up to seven years. Judgments can be reported for five years. Arizona allows judgments to be renewed indefinitely.
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