In 2023, the average Arizonan carried approximately $25,000 in non-mortgage debt such as credit cards, auto loans, and personal loans. The average credit card balance was around $6,200 per person, slightly above the national average.

These figures, combined with a state median household income of $62,055, indicate that many Arizona residents, like many Americans, are struggling to manage their financial obligations and make monthly payments toward their debt. Arizonans facing unexpected expenses often find themselves overwhelmed, especially since you never pay off debt by making minimum monthly payments.

If you're one of the many Arizonans feeling burdened by consumer debt, there are several relief options available to help you recover your financial freedom. Let's explore some Arizona debt relief options so you can pick the best one for you.

Debt Counseling

Debt counseling can help Arizona residents understand their finances. A debt counselor examines your income and expenses so that you have a clearer grasp of your budget. Once professional credit counselors have fully assessed your financial situation, they can offer several strategies to help you manage your debt effectively.

Many non-profit organizations in the state of Arizona provide free or low-cost credit counseling services. Counseling agencies provide valuable education on personal finance management and help you understand the pros and cons of various debt relief options if you live in Arizona.

Debt Management

A debt management plan (DMP) involves working with a credit counseling agency to create a structured repayment plan.

These agencies negotiate with creditors on your behalf to make loan debt repayment easier and better-fitting within your budget. Debt management plans usually help you repay your debt in full within 3 to 5 years. Part of the negotiations is to potentially lower interest rates and waive certain fees, so that the overall amount of debt is more manageable and you can get back on track faster.

DMPs can be an excellent choice for those who need help, guidance, and support in managing their finances while repaying their debts in full.

Debt Consolidation

Debt consolidation rolls all existing debts into one loan. If you have credit card debt, student loan debt, personal loans, medical debt from medical bills, or other unsecured loans, debt consolidation can help by rolling them all into one loan. You use this debt consolidation loan to repay all existing debts, leaving you with a single loan to pay once a month.

Debt consolidation loans simplify your financial situation in two ways: first, by combining multiple debts into a single loan. Second, by offering a lower interest rate. This method often results in lower monthly payments and makes your high interest debt more manageable. It’s also easy to track as you only have to make one monthly payment as opposed to several.

Consolidation is particularly useful for Arizonans with a good credit score who qualify for debt consolidation with favorable loan terms.

Debt Settlement

For many Arizona residents struggling with significant debt, debt settlement can be a powerful solution. In many cases, people find themselves unable to repay their full debt with their current income. They need to settle it and repay a reduced debt amount.

Debt settlement works best if you work with a company like ClearOne. Debt settlement companies will negotiate on your behalf with your creditors to reduce the amount of debt you owe them. While negotiations are ongoing, you put money aside in a dedicated program savings account. Bearing in mind that debt settlement can take up to four years, this savings account will grow significantly.

Once negotiations are successful, the money from the program savings account is used to make settlement payments to your creditors. Once your creditors have been paid, you are debt-free. You have repaid part of your overall debt and can now start afresh. Debt settlement often reduces the amount of debt by 25 to 50%, which is an important reduction.

Debt settlement will stay on your credit report for seven years, though, which means you will find it hard to get a car loan or apply for a credit card. It will also lower your credit score.

Debt settlement programs can be particularly effective for Arizonans with a large amount of unsecured debts, such as credit card debt and personal loans.

Bankruptcy

In cases where other debt-relief options are not sufficient, bankruptcy may be considered as a last resort. There are two main types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy can provide a fresh start by discharging certain debts, while Chapter 13 involves reorganizing debts into a manageable payment plan. Chapter 7 will require you to liquidate assets to repay creditors, while Chapter 13 helps you make a repayment plan based on your income.

In Arizona, approximately 15,000 bankruptcy filings were made in 2022 by residents facing severe financial hardship. Filing for bankruptcy has long-lasting consequences on your credit and financial future, so discuss this option with a qualified attorney before pursuing it. For example, a bankruptcy stays on your credit report for up to 10 years, making it hard to obtain any type of credit.

Debt Relief in Arizona with ClearOne

Debt is stressful and can impact people’s self-esteem and their ability to envision their financial future. Luckily, there are many debt relief options available to Arizona residents. Depending on the amount of debt you have, your income, and your expectations, you can find debt relief with the solution that best works for you.

All Americans deserve to live debt-free. If you picture a more stable financial future for you and your family in the Grand Canyon State, contact ClearOne for a free consultation. Our professional debt specialists will offer you a free debt analysis, present all your options, and help you make the most fitting debt relief program.

If you feel that debt settlement is the best way to a debt-free future, then our ClearOne debt relief professionals will guide you and negotiate with your creditors. Contact us to get a savings estimate today and settle your debt!