Kentucky Collection Laws

Kentucky Collection Law | Kentucky Capitol

5 minute read

Get Debt Help
Choose your debt amount
  • The statute of limitations for credit card debt in Kentucky is 5 years.
  • Written contracts have a 4- or 15-year statute of limitations, depending on the circumstances.
  • A judgment-creditor can ask the sheriff to seize your personal property.

Learn Kentucky's Rules For Garnishment, Liens, and Foreclosure

A lender, collection agent or law firm that owns a collection account is a creditor. The law gives creditors several means of collecting delinquent debt. But before a creditor can start, the creditor must go to court to receive a judgment. See the article Served Summons and Complaint to learn more about this process.

The court may grant a judgment to the creditor. A judgment is a declaration by a court the creditor has the legal right to demand a wage garnishment, a levy on the debtor’s bank accounts, a lien on the debtor’s property, and in some states, ask a sheriff to seize the debtor’s personal property. The laws calls these remedies. A creditor granted a judgment is called a judgment-creditor. Which of these tools a judgment-creditor will use depends on the circumstances. We discuss each of these remedies below.

Debt Collectors Calling?

Receiving collection calls is unpleasant, whether from the original creditor or from collection agency. Call 800-998-7497 to speak with a Money Coach and discuss what to say and not to say in a phone call with a debt collector, and also what kind of financial plan you need to avoid this happening again.

Kentucky Wage Garnishment

The most common remedy judgment-creditors use to enforce judgments is wage garnishment. Here, the judgment-creditor contacts the debtor’s employer and require the employer to deduct a certain portion of the debtor’s wages each pay period and send the money to the creditor. However, several states — Texas, Pennsylvania, and North Carolina — do not allow wage garnishment for the enforcement of most judgments.

Kentucky allows wage garnishment. Kentucky follows federal rules, and exempts 25% of the judgment-debtor's disposable earnings. 

Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law.

Garnishment Laws Vary From State to State
If you reside in another state, see the Wage Garnishment article to learn more.

Levy Bank Accounts in Kentucky

A levy means the creditor has the right to take non-exempt money in a debtor’s account and apply the funds to the balance of the judgment. The procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state’s laws to find if a bank account can be levied.

Kentucky allows bank account levy, which state law refers to as "non-wage garnishment" For bank account attachment, Kentucky courts have held a party to a joint account is presumed to own the entire joint account. Upon notice and objection, the debtor or third-party account tenant may rebut that presumption by proof of separate net contributions to the account, and a showing of an intention that the non-contributor's use of the other's contributions be limited. (Brown v. Commonwealth of Kentucky, 40 S.W.3d 873 (KY App. 1999)).

Kentucky Lien Law

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinances the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

In Kentucky, a judgment lien can be attached to real estate or personal property. Execution may be issued 10 days after the entry of judgment. Execution is issued by the clerk of the court to the Sheriff who makes a return of service on the execution within 90 days. Kentucky exempts the following:

  • one motor vehicle up to $2,500
  • household furnishings, jewelry, clothing and ornaments up to $3,000
  • tools up to $300
  • homestead up to $5,000
  • retirement plans, pensions and insurance proceeds totally exempt
  • Kentucky has adopted the federal bankruptcy exemptions

See KRS 427 to learn more about Kentucky’s exemptions.

If you reside in another state, see the Liens & How to Resolve Them article to learn more.

Kentucky Statute of Limitations

Each state or commonwealth has its own statute of limitations on civil matters. Here are some of Kentucky’s statute of limitations for consumer-related issues:

Account/Type Years Statute
Kentucky statutes of limitations. Source:
Credit card 5 KRS 413.120
Spoken contract
Written contract 15* KRS 413.090
Mortgage contract 3 KRS 413.120 and 413.080
Promissory note 5 KRS 413.120
Judgment 15** KRS 413.090
* Kentucky adopted the 4 year Uniform Commercial Code (UCC) statute of limitations with regard to contracts for the sale of goods and lease contracts.
** Can be renewed.

When the statute of limitations clock starts depends on the circumstances and the particular statute. In most states, the clock starts when the action accrues. In Kentucky, the clock starts from the date of default. The clock may be paused (called "tolled") under some circumstances, or renewed.

Kentucky Foreclosure

A lender will foreclose judicially in Kentucky. This takes 150 days, typically. Under Kentucky's anti-deficiency law, a deficiency judgment is entered automatically if the sale proceeds less expenses are not sufficient to cover the debt owed. See KRS Chapter 426 to learn more.

Kentucky Spousal Debt Liability

Kentucky is a "marital property" state, and adopted a few characteristics of community property law. When a Kentucky couple divorces, marital property, which is property or wealth acquired during marriage, in divided in just proportions, most likely equally (KRS Title 35 Chapter 403 et seq). Kentucky is not a community property state, so the general rule is one spouse not liable for the other spouse's separate debt, with the exception of medical debt.

Kentucky follows the doctrine of necessaries for medical debt. In Kentucky, a husband is liable for his wife's medical expenses regardless of their respective financial situations. A wife is not liable for her husband's medical expenses. (See Rhodus v. Proctor, 433 S.W.2d 625; Carpenter v. Hazelrigg, 45 S.W. 666, Atkins v. Atkins' Adm'r, 262 S.W. 268; Somerset Manor, LLC v. Rees, 2011 Ky. App. Unpub. LEXIS 532; and Adams v. Riddle, 2010 Ky. App. Unpub. LEXIS 151.)


Consult with a Kentucky lawyer who is experienced in civil litigation to get precise answers to your questions about liens, levies, garnishment, and foreclosure.

Recent Oldest

This page is closed to new comments.

  • W
    Sep, 2020

    How long does a lender have to collect on an auto loan that was charged off in March 2015?

    • 35x35
      Sep, 2020

      William, I am not a lawyer, so I can't give legal advice, so please don't treat the information I share as legal advice.

      The statute of limitations on debt starts running from the date of default, not the charge-off date. That is the date you had a payment due and missed it for the first time. In Kentucky, a written contract has a statute of limitations on debt of 15 years. That is the longest running statute for a written contract of any state.

  • C
    Aug, 2020

    I understand that you can't offer legal advice, but I'm in need of some good information in regards to an old overdraft bank account in Kentucky, closed sometime back in 2008... Recently been barraged with calls from debt collector, including recorded messages informing me if I do not voluntarily respond I will be pursued at home and my place of employment, and threatened legal action. I called them once, because the recording stated that "complaints were filed on me for several matters," and found it to be this old debt. Instead of acknowledging the debt or discussing any further, as I was at work at the time, I just hung up. I promptly received a callback/voicemail from the collector informing me that they were sending someone to my address (however the address stated is not my current residence). What course of action would be recommended?

    • 35x35
      Sep, 2020

      Chrystal, I appreciate you acknowledging that what I share is not legal advice.

      Your question is tricky. The statute of limitations on debt for a written contract in Kentucky is 15 years. I believe the laws for a written contract would govern the account agreement you signed when opening the bank account. Therefore, I conclude that you are subject to a lawsuit and would be judged responsible for the debt. 

      The tricky part is that the collector seems to be making threats that are not permissible. Why they would do that when a legitimate grounds to collect the debt exist, I am not clear. It could be that it brings in money while not drawing a reaction that outweighs it.

      In your position, I don't know if there is a violation, but a good way to check is to contact an attorney that handles violations of the FDCPA (Fair Debt Collection Practices Act). This type of attorney doesn't charge you a fee but will takes the case if the attorney feels you have a winning case, in which case the attorney will get money from the creditor tryiing to collect from you. Do a search online for FDCPA attorney and the name of the city in which you live. Please report back on how things go for you!

  • H
    Jun, 2020

    I recently received a summons for a credit card I got when I was 18. I forgot about it and missed a ton of payments and it went to a debt collector. However I tried multiple times to get a payment plan set up to pay this debt but they literally sold my account to 3 separate debt collectors within a month. It took me forever to track it down. By then I started thinking maybe I was being scammed for money. Because it just didn’t seem right. Now I am being sued for it. They claim in Aug they will begin a judgement against me. I currently work part time as a substitute teacher, I own no property and I don’t know how I’m going to just come up with $2,000 like it’s magic. I was curious as to what I could do? If I were to get a loan for the money and pay it off to the debt collector and show proof it’s all paid come August in court then will they deny the judgement against me? Will I have to pay the court cost?

    • 35x35
      Jul, 2020

      Hallie, I am not a lawyer, so any information I share with you must not be considered legal advice.

      You don't say your age, but, unfortunately The Bluegrass State has the longest statute of limitations for a written contract, 15 years, of any state. If it has been less than 15 years, a lawsuit followed by a judgment is a real threat. If longer than 15 years go to court and argue the SOL as a defense and avoid restarting the clock on the SOL by making any size payment.

      In regards to the idea of getting a loan to pay them off, if you can qualify for a loan and can afford the payment it would put the matter to an end. There would be need to go further in a court case for the collector. I recommend getting a written agreement that makes it clear your payment pays the debt in its entirety and brings the matter to a close.

  • S
    Jun, 2020

    I had a lawyer call me today about Capital one credit card from 2009. I did not know I had that debt ,it does not show on my credit report. Do I need to pay that lawyers office ? they’re threatening to take me to court. My question is ,can they take me to court over $1000 debt to a credit card for 09 when it’s 2020?

    • 35x35
      Jun, 2020

      Shelli, only lawyers can give legal advice and I am not a lawyer. I will share some information with the understanding that it is not legal advice.

      First, how long a debt stays on the credit report is a separate matter from how the debt can be collected. A creditor is not required to report a debt to the bureaus. A delinquent debt could result in a lawsuit and judgment without ever appearing on a credit report.

      The key issue for you is the statute of limitations (SOL) on debt for a credit card. The SOL for credit card debt in the Bluegrass State is 5 years. SOL issues can be tricky, so it is best to speak with an attorney and review the matter. For example, if you make a payment on the debt it could start the 5-year clock again. If you haven't done anything to restart the clock, then I think that you avoid paying this debt. Make sure the lawfirm has your current mailing address. If they send you notice that you are being sued, be sure to answer it by the time limit specified. Go to court if sued and tell the judge that you wish to use the SOL as a defense.

      I don't know if there is a violation, but a good way to check is to contact an attorney that handles violations of the FDCPA (Fair Debt Collection Practices Act). They don't charge you a fee but will take the case if they feel they can win and get money from the creditor harassing you. Do a search online for FDCPA attorney and the name of the city in which you live. Please report back on how things go for you!                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

  • A
    Jun, 2020

    How long does a debtor have to collect on medical debt?

    • 35x35
      Jun, 2020

      Amber, I will share some information with you but I need you to understand that I am not a lawyer and I am not giving legal advice.

      I think you meant to ask how long a debtor (the person who owes the debt) is on the hook for a medical debt in Kentucky. Most medical debt requires you to sign some agreement and falls under the category of a "written contract." The statute of limitations on debt for a written contract in Kentucky is 15 years. That means the creditor has 15 years from the date that you default on the debt to file suit against you to collect. The 15 years is very unfriendly to consumers; the Bluegrass State's 15 year collection period gives is the longest one of any state in the USA.