Kentucky Statute of Limitations on Debt
In Kentucky, there is a statute of limitations on debt that limits the amount of time a creditor has to sue a debtor for unpaid debts. This means that if a creditor fails to take legal action within the specified time frame, they are unable to bring a lawsuit against the debtor in an attempt to collect the debt.
The statute of limitations for debt in Kentucky varies depending on the type of debt that is owed. Below, we have outlined the various types of debt and their associated statutes of limitations.
Written Contracts
For written contracts, such as credit card agreements, the statute of limitations in Kentucky is five years. This means that creditors have five years from the date of the last payment made by the debtor to file a lawsuit.
It is important to note that making a partial payment on a debt can reset the statute of limitations clock. This is because the clock starts ticking from the date of the last payment made, regardless of whether it was a full or partial payment.
Oral Contracts
For oral contracts, such as verbal agreements to pay back a loan, the statute of limitations in Kentucky is also five years.
Promissory Notes
For promissory notes, which are written promises to pay back a debt, the statute of limitations in Kentucky is 15 years.
Open Accounts
For open accounts, such as utility bills or medical bills, the statute of limitations in Kentucky is five years.
Judgments
If a creditor obtains a judgment against a debtor, they have 15 years to collect the debt in Kentucky. This means that they can garnish the debtor’s wages, seize their assets, or take other legal action to satisfy the debt.
Tolling the Statute of Limitations
There are certain circumstances that can toll, or pause, the statute of limitations clock in Kentucky. These include:
- If the debtor is out of state, the clock is paused until they return to Kentucky.
- If the debtor is in bankruptcy, the clock is paused until the bankruptcy is resolved.
- If the debtor is a minor, the clock is paused until they reach the age of majority.
- If the creditor obtains a judgment against the debtor, the clock is paused for the duration of the 15-year collection period.
What Happens if the Statute of Limitations Expires?
If the statute of limitations on a debt expires, the debtor is no longer legally obligated to pay the debt. However, it is important to note that the debt may still appear on the debtor’s credit report and can negatively impact their credit score.
Additionally, creditors may still attempt to collect on the debt, even if the statute of limitations has expired. They may use aggressive collection tactics, such as threatening legal action or harassing phone calls, in an attempt to convince the debtor to pay. In these cases, it is important for the debtor to know their rights and seek legal counsel if necessary.
Conclusion
Understanding the statute of limitations on debt in Kentucky is important for both debtors and creditors. Debtors should be aware of their rights and the time frame in which they can be sued for unpaid debts. Creditors should likewise be aware of the statute of limitations and take legal action within the appropriate time frame to collect on debts owed. By understanding the law and following proper procedures, both parties can work to settle debts in a fair and legal manner.
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