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Kentucky Collection Laws

Kentucky Collection Laws

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Daniel Cohen
UpdatedJun 7, 2024
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    5 min read
Key Takeaways:
  • 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:

Credit card5KRS 413.120
Spoken contract
Written contract15*KRS 413.090
Mortgage contract3KRS 413.120 and 413.080
Promissory note5KRS 413.120
Judgment15**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.

Kentucky statutes of limitations. Source:

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.

Struggling with debt?

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Housing debt totaled $12.82 trillion and non-housing debt was $4.88 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in District of Columbia, 20% have student loan debt. Of those holding student loan debt, 8% are in default. Auto/retail loan delinquency rate is 8%.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.



DDean, Jun, 2021

I have a Leon on my home of 25,000 I did not know of until my husband died. They say I have a store credit card I nerved paid. I don’t know of this card this house was totally in my husbands name when he passed they places the Leon on house when I was now the only owner. I have no idea when or how long or old it is. My bank paid off all my credit cards about 24 months ago. All we found that credit karma showed. CK never showed this card or banker would have paid it too. Now they put a Leon on my house for 25,000$. What can I do?

JJosh, Aug, 2021

Hello Dean, 

Thank you for reaching out. Please do not take my answer to be legal advice, as I am not an attorney and only attorneys can offer legal advice. According to the article the Creditor must file with the county clerk for any country a notice of Judgement lien containing the court of record entering the judgment, the civil action number of the suit in which the judgment was entered. In other words, the paper trail or your investigation should be fruitful if you research your or your husband's name within the local country court. You should have dates confirming when this took place. 

Generally, the deceased person's estate is responsible for paying any unpaid debts. The estate's finances are handled by the personal representative, executor, or administrator. That person pays any debts from the money in the estate, not from their own money. I think you mentioned this when you said the bank paid off all my credit cards about two years ago. My point is the creditor should have notified the executor but that also should be the executor's role to notify the creditors that the debtors ( Your Husband ) had passed away. 

Creditors do have a time frame. They need to accomplish this within about 6 months however if it happed before he passed this Lien may stay for about 15 years depending on the laws. 

Below are the resources I had reviewed. If you have any questions continue to review our Website we have affiliates that may be able to assist. You may want to consider seeking an attorney if you need further assistance. 

Resources sited

Regards, Josh 

TTammy, May, 2021

I have a collection agency who has purchased an account from 2009 on a repo vehicle coming after me. They ended up getting a judgement against me in 2013 because I wasn't in court due to it being sent to a former address. After they started garnishing my wages I researched and found it. Since then I have tried to work with them but it seems they want to keep pounding for more. They have garnished my bank account several time for the entire balance of the account at the day it hits the account. If I had the entire amount of the loan in my account they would have taken it. One just hit last week. Is there anything I can do? I have made payments but have missed when I couldn't afford to make one and that's when they hit my bank. They have even taken cash out of my daughter's account because my name is on it, she is only 16. I believe in paying my bills but this is quite ridiculous. I even offered them my tax refund for a settlement and they refused. They want the total amount of the loan.

JJosh, Aug, 2021

Hello Tammy,

Thank you for reaching out. We are sorry about your financial stress. You did not confirm your residence. Please do not take my answer to be legal advice, as I am not an attorney and only attorneys can offer legal advice. 

The law gives creditors several means of collecting a delinquent debt. In your case, the creditor was granted a default judgment. The description of your inquiry is known as a Bank levy. The creditor has the right to collect non-exempt money in a debtor's account and apply the funds to the balance of the judgment. Your state laws will determine how much or how this is collected if the court did not include it in the written document. 

We encourage you to review your state laws on how a levy is handled so you are informed of any situation that may along. 

Regards, Josh  

TToney L Fields, Feb, 2021

Hello, I understand you are not an attorney, My questions is I received judgement served by the Sheriff for a debt, However, I'm on SSDI and Living in a Section 8 housing complex. I have nothing, but can they take my furniture, garnish my SSDI? I'm Confused. Thank You

JJosh, Aug, 2021

Hello Toney.

Thank you for reaching out to us. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

According to the article in Kentucky, a judgment lien can be attached to real estate or personal property. However, there are some exemptions. 

If you need precise answers please call a local attorney. 

Regards, Josh

CCharles, Feb, 2021

Is Kentucky using federal pandemic rules at this time waiving judgement payroll garnishment at the moment??

JJosh, Aug, 2021

Hello Charles. 

Thank you for reaching out. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

At this time the best way to answer this is to speak to a local attorney to determine if Kentucky is using Federal Pandemic Rules. Also, I searched Federal Pandemic Rules and I did not see anything formally discussed. Can you elaborate what you mean by Federal Pandemic rules? 

Generally, in my experience since March of 2020 collectors having been using their right to secure the debt by means of litigation. 

Regards, Josh 

TTev, Jan, 2021

Are out of state 3rd party debt collectors allowed to pursue a debt in KY?

JJosh, Aug, 2021

Hello Tev.

Thank you for reaching out.

Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

Yes, colletors can pursue you to collect a debt. However, they would need to file in your state and jurisdiction to pursue litigation.

If have any questions please let us know.

Regards, Josh