Statute of Limitations Law Regarding Debt in Kentucky

Kentucky law sets forth several statutes of limitations on a creditor's right to enforce a debt. These statutes constitute a deadline by which the creditor must file a lawsuit against the debtor. If the creditor misses the deadline, the court can dismiss the lawsuit at the debtor's request. The length of time set by the statute of limitations depends on the basis for the debt.

Written Contracts

Kentucky Revised Statute 413.090(2) generally provides a 15-year statute of limitations to enforce a written contract. However, Kentucky Revised Statute 355.2-725 provides a special four-year statute of limitations on written contracts related to the sale of goods, such as an installment agreement involving consumer goods. In either situation, the limitation period begins on the date that the contract is breached -- that is, when the debtor failed to make a payment.

Oral Contracts and Open-End Accounts

If the contract is "not in writing, express or implied," then the five-year limitation period set forth in Kentucky Revised Statute 413.120 applies to enforcing the debt. This statute applies to all oral contracts and open-end accounts, such as consumer credit card accounts. Trade accounts between merchants and charge accounts provided by merchants to consumers are also subject to the five-year limitation period.

Judgments

Creditors who file a lawsuit to enforce a debt before the statute of limitation expires can pursue the lawsuit to a judgment. When the debt is made into a judgment, it has the effect of restarting and, in most cases, enlarging the statute of limitations to enforce the debt. Subsection (1) of Kentucky Revised Statute 413.090 gives a creditor 15 years to enforce a judgment by using such court processes as a bank account or wage garnishment. The time period is calculated from the date of the creditor's last court action to enforce the judgment. Therefore, as long as the creditor does not allow 15 years to pass before taking the next action, the statute of limitations on the judgment can be extended indefinitely.

Debt Incurred in Another State

The statute of limitations for debts is not uniform throughout the country and can vary significantly from state to state. For example, if a resident of Delaware defaults on a credit card account, the limitation period to enforce the debt under Delaware law is three years as opposed to Kentucky's five-year statute. However, if the Delaware resident moves to Kentucky, the creditor cannot rely on the longer Kentucky statute of limitations. Kentucky Revised Statute 413.320 states that, if the debt would be barred under the laws of the state where it was incurred, it is barred in Kentucky.