I work out of Phoenix, and the question I hear most from Valley credit managers is how long they have left to collect. If your customer is a Phoenix-area business, Arizona law sets the clock: a business debt that rests on a written contract signed in the state generally has to be sued on within six years. A debt on an open account or an oral agreement generally has three. Those two numbers decide how much leverage a creditor still holds, and most companies I talk to have never checked which one applies to their invoices.
This guide covers the deadlines for collecting business debt in Phoenix and across the Valley the way a credit manager needs it: which clock applies, when it starts, what can restart it, where interest belongs in your terms, and what to do while the claim is still worth something. It is written for companies owed money by another business. Consumer debt runs under different rules and is not what we do.
Phoenix, Scottsdale, Tempe, Mesa, Chandler and Gilbert all sit in Maricopa County, and the same Arizona clocks apply to every one of them.
- Arizona gives six years to sue on a written contract executed in the state and three years on an open account or oral agreement, under A.R.S. 12-548 and 12-543.
- On an ongoing merchant-to-merchant open account, no item is barred as long as any item on the account was incurred within the last three years.
- Only a written acknowledgment signed by the debtor can pull a time-barred Arizona claim back into play. A phone promise does nothing.
- Want a late charge or interest on past due invoices? Put it in your signed credit application or contract, whether your terms are due upon receipt or net 30.
- If you have a signed agreement that allows for collection costs or collection agency fees, those charges may be included in the amount sought during collection. If legal action becomes necessary, recoverable fees and costs are determined under applicable Arizona law and are ultimately subject to the court.
- A commercial claim loses leverage long before the deadline. Place it while a lawsuit is still a credible option, not after.
How long does a Phoenix business have to collect a debt?
Arizona splits business debt into two lanes. The longer lane is for debt “evidenced by a contract in writing executed within this state.” Sign a supply agreement, a master services agreement, or a credit application with payment terms in Arizona, and the six-year period in A.R.S. 12-548 is the one you are working with.
The shorter lane, A.R.S. 12-543, covers debt “where the indebtedness is not evidenced by a contract in writing” and actions “upon stated or open accounts.” That is where a lot of B2B receivables actually live: a customer set up on net-30 terms with a purchase order and a string of invoices, but no signed contract in the file. Three years.
There is a carve-out worth knowing if you sell to the same customer month after month. For “an open account between merchant and merchant, their factors or agents,” no item on the account is barred “so long as any item thereof has been incurred within three years immediately prior to the bringing of an action.” In plain terms, an active trade account keeps older items alive as long as the account itself is still active. Once the customer stops buying, that protection starts to run out.
| What is behind the invoice | Arizona statute | Period |
|---|---|---|
| Written contract, credit agreement or signed terms executed in Arizona | A.R.S. 12-548 | Six years |
| Open account, stated account, or oral agreement | A.R.S. 12-543 | Three years |
| Ongoing merchant-to-merchant open account | A.R.S. 12-543 exception | No item barred while any item is under three years old |
A signed credit application is the single cheapest thing you can do to move a customer from the three-year lane into the six-year lane. If yours does not have one, the free credit application and collection letter templates on this site are a starting point.
When does the clock start on an unpaid invoice?
Creditors routinely miscount this. The clock does not start when you first noticed the account was past due, when you sent the third reminder, or when the customer stopped answering. It starts when the customer was obligated to pay and did not. If your invoice says net 30 and the customer paid nothing, day 31 is your reference point, and the years count from there.
That is also why sloppy terms cost money. An invoice with no due date, a PO that contradicts the credit application, or a verbal side deal on payment timing all give a debtor’s attorney something to argue about when the date matters most. Laws vary by state, facts vary by account, and none of this is legal advice, so when a large balance is getting old, confirm the accrual date with an Arizona attorney before you rely on it.
Can a written acknowledgment restart the limitation period?
Every collector has heard “we’ll get you taken care of next month” from a debtor who has no intention of doing so. In Arizona that sentence has no effect on the statute. What matters is a signed writing that acknowledges the debt. Whether a particular email or e-signed document satisfies the signature requirement is a question for counsel, and the answer can depend on what the document says and how it was sent.
The practical move is simple. When a customer asks for more time on a balance that is aging, put the arrangement on paper, state the amount, and get a signature. You are not being difficult. You are protecting a claim that the customer just told you they still owe.
Can you charge interest on an overdue invoice in Phoenix?
A line on the bottom of an invoice that the customer never agreed to is a weak place to hang a rate. The credit application or the contract is the strong place. If your terms say nothing about interest today, that is worth fixing before the next Valley customer signs.
Once a claim moves toward court, two statutory rates come into play. Where no rate was contracted for in writing, A.R.S. 44-1201 sets a legal rate of ten percent a year, and judgments carry their own rate under the same statute. That matters if a claim goes to litigation through our commercial debt collection services and an attorney reduces it to judgment.
Why does the statute matter if you never plan to sue?
Most commercial claims never see a courtroom. They resolve because the debtor, or the debtor’s lawyer, understands that a lawsuit is a real option and that it will cost more than settling. Strip that option away and the conversation changes completely. I have watched creditors sit on six-figure balances for years out of loyalty to a long-time customer, then discover that the loyalty was one-sided and the clock had run.
There is a second reason. A commercial collection agency that offers legal forwarding needs a viable claim to forward. An Arizona attorney will not take a time-barred account, and a claim that is close to the line has to be filed fast, which is expensive. The earlier an account is placed, the more tools are still on the table.
What should a creditor do before the deadline gets close?
Here is the checklist I give credit managers who call with an Arizona account that is getting old:
- Find the paper. Signed credit application, contract or MSA, purchase orders, every invoice, proof of delivery, statements, and the email trail. This decides which statute applies and proves the accrual date.
- Fix the record. If the customer has acknowledged the balance in writing at any point, save it. If they have not, ask for a signed payment arrangement now.
- Send a final demand. One letter, specific amount, specific date, specific consequence. Not the fifth “friendly reminder.”
- Place the claim. A commercial agency works on contingency, so there is no fee unless money is collected. What you are buying is speed and a credible path to legal action.
- Do not wait for the last quarter of the period. Legal forwarding, service on the debtor and a filing all take time. A claim with eighteen months left is easy to work. A claim with six weeks left is a scramble.
If you sell on credit to companies in Phoenix, Scottsdale, Tempe, Mesa, Chandler or Gilbert, this is the process I would run before the account gets anywhere near the line.
Does this apply if you are outside Arizona and owed by a Phoenix company?
We collect from Phoenix and Valley businesses on behalf of creditors across the country. The recurring surprise for out-of-state creditors is that the contract they signed in Ohio or Texas may not be measured by Arizona’s six years at all. The governing-law clause in your agreement, and the state where it was executed, are the two facts an attorney will want first. A commercial claim with a clean paper trail travels well across state lines. A claim built on handshakes does not.
Owed money by a Phoenix business?
Talk to Sven. Commercial (B2B) collections only, on contingency, so there is no fee unless we collect. Bring the account, we will tell you honestly whether it is worth placing and what the timeline looks like.
Prefer the phone? 866-341-6316. Or schedule a free consultation online.
Frequently asked questions
Is the Arizona statute of limitations the same for business debt and consumer debt?
No. This article covers debt owed by one business to another. Consumer debt is governed by additional federal and state rules that do not apply the same way to commercial accounts, and it is not a type of debt The Guy That Gets You Paid handles.
What if the contract was signed outside Arizona?
A.R.S. 12-548 refers to a written contract executed within Arizona and carries a choice-of-law provision. A contract signed in another state, or one with a governing-law clause naming another state, may be measured by that state’s limitation period instead. An attorney can tell you which applies to your agreement.
Does a partial payment extend the limitation period in Arizona?
The Arizona statute that addresses reviving a time-barred debt, A.R.S. 12-508, requires a written acknowledgment signed by the party to be charged. Whether a partial payment or a payment note has that effect on a specific account is a question for Arizona counsel. Ask for a signed arrangement rather than relying on the payment alone.
Can a collection agency still collect a business debt after the statute runs?
A debtor can still pay voluntarily, and some do once the account is worked professionally. What is gone is the credible threat of a lawsuit, which is the main source of leverage on a commercial claim. That is why placing an account early matters more than placing it at all.
Do I need an Arizona attorney to sue an Arizona debtor?
A company suing in Arizona courts will generally need Arizona-licensed counsel. Commercial collection agencies with a legal forwarding network handle that introduction as part of the placement, so the creditor is not searching for a lawyer under deadline pressure.
Sources: Arizona Revised Statutes 12-548, 12-543, 12-508 and 44-1201, reviewed September 2026. Statutes change and laws vary by state. This article is general information from a commercial collections professional, not legal advice, and it is not a substitute for advice from an attorney licensed in your state. About Sven Nelson.