Thank you very much for responding and providing more information - it's appreciated.
The Fair Debt Collection statute of limitations in which to collect is 6 years for a "written contract" - thus, it appears that they will file suit in order to protect their rights - and, if so, they can obtain judgment against you. This would mean that once judgment is entered, the collection company can garnish wages (if you are employed), they can obtain bank levies (to seize any and all of your bank funds) - if you own any property (although you state you don't have any assets) they can place liens on property...they will also claim the car, of course. Also, please note that should you be married, they can go after your spouse, securing wage garnishment, etc.
In addition to the original monies owed, interest accrues daily at the rate of 10 to 18 percent (from the date of charge off to present - til it's paid in full). Therefore, if you are able to pay now - and wish to resolve this matter, you should attempt to negotiate with them. Some agencies will waive the interest if the initial amount owed is paid in full - thus, you would save much money.
I would suggest that you pay them now, otherwise, as mentioned above, they must take action in order to protect their rights (statute of limitations will run within months, perhaps sooner). They do have the right to the vehicle - however, should you decide to pay in full now you may (I'm not saying for certain) have the right to keep the vehicle - but this is something that you can discuss with the bank or an attorney. I have worked in law firms wherein this has happened - and the party was allowed to keep the vehicle...but, I'm in California.
If you have any further questions, please do not hesitate to let me know.
Peace, Love & Happiness,
The Mystic Wave
Arizona Collection Agency Laws