Arizona Judgment Laws

August 9, 2023


This article highlights some judgment-related laws in Arizona. Arizona laws are often referenced officially as being abbreviated either as ANN and/or A.R.S.

Laws change over time, so please confirm any laws mentioned in this, or any of my articles. My articles are my opinions, and not legal advice. I am a Judgment Broker, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.

Arizona Revised Statute Ann 12-1570: Search on the web for “12-1570” to see the full text of this law, or any Arizona statutes mentioned in this article. This law has the definitions of “deliver”, which means any of the following: (a) To hand deliver. (b) To mail by regular first class mail to the address which the sender determines through reasonable good faith efforts to be best calculated to reach the recipient in a timely manner. (c) To serve on a party pursuant to the rules of civil procedure applicable to a summons. This law also has definitions for “exempt monies or property”, “good faith”, “judgment creditor”, “judgment debtor”, “monies”, “nonexempt monies or property”, “personal property”, and “Receipt”.

Arizona Revised Statute Ann 12-1572: Search on the web for “12-1572” to get to the Arizona State Legislature web site, to see the full text of this law. This law describes how writs of garnishment are filled out and issued.

Arizona Revised Statute Ann 12-1574: Search on the web for “12-1574” to get to the Arizona State Legislature web site, to see the full text of this law. 12-1574 covers the issuance, service, and return of writs, and notices to the judgment debtor. A summary is: The court issues a properly filled out writ for the creditor to give to the Sheriff, to garnish assets of the judgment debtor. The writ must be correctly filled out with the amount owed, any allowed costs, and how the interest was calculated.

Arizona Revised Statute Ann 12-1577: Search on the web for “12-1577” to get to the Arizona State Legislature web site, to see the full text of this law. 12-1577 specifies how a bank or asset holding company is to be served, how specific branches need to be served, and how much the bank can charge if it has to do a search to find accounts at other branches.

Arizona Revised Statute Ann 12-1578: Search on the web for “12-1578” to get to the Arizona State Legislature web site, to see the full text of this law. 12-1578 limits transfers by garnishees after service of a garnishment. This statute is muddy, because it reads as if it was “not written not as non-clearly as one would not wish to not read if they did not want to not read non-confusing laws”. A summary is that when a garnishee is served, they need to follow instructions carefully, when to pay attention to exemptions and how to handle them, how no shenanigans are allowed, how the judgment debtor can post a bond to complicate things.

Arizona Revised Statute Ann 12-1582: Actions in garnishment in which an answer has been filed by a garnishee shall not be dismissed except upon notice to the garnishee and an opportunity to be heard upon the question of allowance of garnishee’s costs and attorney’s fee.

Arizona Revised Statute Ann 12-1591: Covers taxing costs:

A. When the garnishee is discharged upon his answer, the cost of the proceeding, including reasonable compensation to the garnishee, shall be taxed against the judgment creditor.

B. When there is no written objection to the answer of the garnishee and the garnishee is held on his answer, the costs as provided in subsection A, shall be taxed against the judgment debtor.
C. Where the answer is objected to in writing the costs shall abide the issue.

Arizona Revised Statute Ann 12-1595: Search on the web for “12-1595” to see the full text of this law. This law covers garnishment of bank accounts in the name of more than one person. It details who must be served, who must be noticed, how banks need to answer the garnishment, how to handle complications, and how and when bonds need to be posted.

Arizona Revised Statute Ann 12-1596: Search on the web for “1-1596” to get to the Arizona State Legislature web site, to see the full text of this law. This law describes the required court forms, and how people can get them at no charge, and what must be in notices to the parties. Also exemptions are defined, how to disagree with court decisions, and when Spanish wordings must be used.

Arizona Revised Statutes Chapter 9 governs Collection Agency. In that Chapter it says: ARTICLE 2 – LICENSING 32-1021. Original application for license; financial statement; bond; definition A. A person desiring to conduct a collection agency shall make an original application to the department upon forms prescribed by the superintendent setting forth verified information to assist the superintendent in determining the applicant’s ability to meet the requirements of this chapter. B. An application for an original or a renewal license shall be accompanied by: 1. A financial statement in the form provided in section 32-1022, showing the applicant’s assets and liabilities and truly reflecting the applicant’s net worth in cash or its equivalent. 2. A bond in the form provided in section 32-1022, computed on a base consisting of the gross annual income of the licensee generated from all business transacted in this state by the licensee during the preceding year, in the minimum amount as follows:

Base Minimum Bond

Not over $250,000 $10,000

$250,001 to $500,000 $15,000

$500,001 to $750,000 $25,000

$750,001 and over $35,000

C. The superintendent may require from all applicants additional information that the superintendent deems necessary in determining whether the applicant is entitled to the license sought. D. For the purposes of this section, “all business transacted in this state” includes:

1. The collection of debts from debtors who reside in this state, regardless of where the licensee is located.

2. The collection of debts made from an office in this state, regardless of where the debtor resides.

3. The collection of debts made on behalf of creditors who reside in this state, regardless of where the debtor and the collection agent reside. 32-1024. Licensing out-of-state collection agents The superintendent shall issue a license to operate a collection agency to a person who holds and presents with the person’s application a valid and subsisting license to operate a collection agency issued by another state or an agency of another state if:

1. Requirements for securing the license were, at the time of issuance, substantially the same or equal to requirements imposed by this chapter. 2. The state concerned extends reciprocity under similar circumstances to licensed collection agents of this state.

3. The application is accompanied by the fees and financial and bonding requirements set forth in this chapter. 32-1028. Fees Every original or renewal application shall be accompanied by the fees prescribed in section 6-126. 6-126. Application fees for financial institutions and enterprises A. The following nonrefundable fees are payable to the department with the filing of the following applications: 15. To apply for a collection agency license, one thousand five hundred dollars.

ARTICLE 3 – REGULATION 32-1051. Duties of licensees An individual, firm, partnership, association or corporation to whom a license is to be issued under this chapter shall: 1. Meet the financial responsibility and bonding requirements of this chapter. 2. Not have been a former licensee under the provisions of this chapter whose license was suspended or revoked and not subsequently reinstated.

3. Deal openly, fairly and honestly in the conduct of the collection agency business.
Except for attorneys licensed to practice law, not attempt to collect any collection fee, attorney’s fee, court cost or expenses unless the fees, charges or expenses are justly due from and legally chargeable against the debtor, or have been judicially determined, nor shall any licensee engage in any unfair or misleading practices or resort to any oppressive, vindictive or illegal means or methods of collection. 5. Except for attorneys licensed to practice law, not give or send to any debtor, or cause to be given or sent to any debtor, any notice, letter, message or form which: (a) Simulates any legal process. (b) Is ambiguous as to or misrepresents the character, extent or amount of the obligation of the debtor. (c) Represents or infers that the existing obligation of the debtor may be increased by the addition of attorneys’ fees, investigation fees, service fees, or any other fees or charges when in fact these fees or charges may not legally be added to the existing obligation of the debtor. (d) Threatens to sell the obligation of the debtor to any person, firm or group. (e) Uses or sets forth the name of or purports to be from any attorney at law or legal firm.

6. Except for attorneys licensed to practice law, not use any letterhead, or literature bearing any heading, slogan or statement representing or inferring that the licensee practices law, renders legal services or advice, or maintains a legal department. 7. Not by the use of any letterhead, advertisement, agreement, form, circular or other printed matter, or otherwise, convey the impression that the individual, firm, partnership, association or corporation is vouched for or is an instrumentality of the state, a political subdivision of the state, or the department. 32-1053. Denial, revocation or suspension of license A. The superintendent may deny a license to a person or suspend or revoke a license pursuant to title 41, chapter 6, article 10 if the superintendent finds that an applicant or licensee: 1. Is insolvent as defined in section 47-1201. 2. Has shown that the applicant or licensee is not a person of honesty, truthfulness or good character. 3. Has violated any applicable law, rule or order. 4. Has been convicted in any state of any felony or other crime involving breach of trust or dishonesty.

5. Has had an order entered against the applicant or licensee by an administrative agency of this state, the federal government or any other state of the United States and that order is based on conduct involving fraud, deceit or misrepresentation by the licensee or applicant.

6. Has made a material misstatement or omission on the application for a license or on any document required to be filed with the superintendent. B. It is sufficient cause for the denial, suspension or revocation of a license if an officer, director, partner, employee or controlling person of the collection agency has acted or failed to act in a manner that would be cause for denial, suspension or revocation of a license. For purposes of this subsection, “controlling person” means a person who owns more than a twenty per cent equity interest in the collection agency and has the power to actively participate in the conduct of the collection agency. 32-1055. Unlawful acts

A. It is unlawful for a person to conduct a collection agency in this state without having first applied for and obtained a license under this chapter.

B. A collection agency licensed under this chapter shall not directly or indirectly aid, abet or receive compensation from an unlicensed person. Nothing in this chapter shall prevent a licensed agency from accepting, as forwardee, claims for collection from a collection agency or attorney whose place of business is outside this state.

C. A licensee shall not advertise a claim for sale or threaten to so advertise a claim as a means of endeavoring to enforce payment, nor shall a licensee agree to do so for the purpose of soliciting claims. This subsection shall not be deemed to affect a licensee acting as assignee for the benefit of a creditor or acting under a court order.

D. It is unlawful for a person conducting a collection agency in this state to:

1. Fail to render an account of and pay to the client for whom collection has been made the proceeds collected, less collection charges as agreed to by the person and the client, within thirty days from the last day of the month in which the proceeds were collected. If the amount due the client is less than five dollars, payment may be deferred for an additional thirty days.

2. Fail to deposit with a local depository all monies collected by the person and due to the person’s clients, and to fail to keep these monies deposited until these monies or equivalent amounts are remitted to the person’s clients. Notwithstanding this paragraph, if a person conducting a collection agency does not maintain an office in this state, the person may deposit and keep these monies in a depository in a state where the person maintains the person’s principal office.

3. Fail to keep a record of monies collected and the remittance of these monies.

4. Fail to notify the department within ten days of any change of name under which the person does business as a collection agency or address at which the person conducts business.

5. Aid or abet, directly or indirectly, any person, persons or organizations in evading or violating any of the provisions of this chapter. 32-1056. Violation; classification A.

A person operating a collection agency without a license shall be guilty of a class 1 misdemeanor.

So… if you want to enforce a judgment in Arizona, you should either:

(1) own it outright with no future payment contracts,
(2) do it through an attorney (who is exempt from these licensing requirements under 32-1004),
(3) turn it over to an AZ licensed collection agency, or
(4) jump through all the hoops and pay their exorbitant fees to get yourself licensed in AZ. If you get caught doing it any other way you could end up in hot water. I am told that a JRS was recently fined $7,000 for unlicensed operations in AZ.

Arizona Revised Statute Ann 44-1201: Search on the web for “44-1201” to see the full text of this law. This law sets the rate of interest in Arizona for loans and judgments.

If you need to find a judgment recovery attorney in Arizona, contact a judgment broker, or visit the Arizona Bar web site at: www.ArizonaBar.org.

Some of the most popular Arizona banks:

24224, BNC National Bank, 20175 North 67th Avenue, Glendale, Arizona 85308, www.bncbank.com

24683, West Valley National Bank, 2440 North Litchfield Road # 100, Goodyear, Arizona 85395, www.wvnb.net

24320, Meridian Bank, National Association, 2700 North Central Avenue, # 110, Phoenix, Arizona 85004, www.meridianbank.com

24636, Republicbankaz, National Association, 909 East Missouri Ave, Phoenix, Arizona 85014, www.republicbankaz.com

24773, Sunbank, National Association, 2555 West Apache Trail, Apache Junction, Arizona 85120, www.sunbankaz.com

24805, First Scottsdale Bank, National Association, 15190 North Hayden Road, Scottsdale, Arizona 85260, www.fnbscottsdale.com

24671, Goldwater Bank, National Association, 7135 East Camelback Road, Scottsdale, Arizona 85251, ww.goldwaterbank.com

24049, Canyon Community Bank, National Association, 7981 North Oracle Road, Tucson, Arizona 85704, www.canyoncommunitybank.com

21383, National Bank of Arizona, 6001 North 24th Street, Phoenix, Arizona 85016, www.nbarizona.com

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