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Kentucky Debt Collection Laws: Time Limits, Garnishment and Your Rights

Kentucky debt rules: statute of limitations, wage garnishment limits, protected bank and home exemptions, judgments, collector rules and how to answer a debt lawsuit.

Quick answers for Kentucky

Time limit to sue on a written contract
10 years to sue on a written contract signed after July 15, 2014. 15 years for written contracts signed on or before that date. KRS 413.160; KRS 413.090(2)
Wage garnishment limit
Follows the federal limit: no more than the lesser of 25% of weekly disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage. KRS 427.010(2)-(3); KRS 427.140
Money protected in a bank account
No general bank account exemption. Kentucky's exemption statutes protect specific property and funds (for example health savings accounts) rather than a set dollar amount in a bank account. KRS 427.010(1); KRS Chapter 427
Answering a debt lawsuit
File a written Answer with the Circuit Court Clerk in the county named on the summons within 20 days after you were served (the count starts the day after service), and serve a copy on the plaintiff or its attorney with a certificate of service. Summons form AOC-105; KRS 24A.230 (small claims)

Last verified: 2026-10-26

Time limits

Time limit to sue on a written contract10 years to sue on a written contract signed after July 15, 2014. 15 years for written contracts signed on or before that date.
KRS 413.090: https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=43545
Source: KRS 413.160; KRS 413.090(2)
Time limit for credit cards and open accounts5 years for a contract that is not in writing (an oral agreement). Kentucky's statutes do not set a separate period for credit cards or open accounts.
Whether a credit card or open account is treated as a written contract (10 or 15 years) or an unwritten one (5 years) depends on the documents and on court decisions.
Source: KRS 413.120(1)
How long a judgment lastsA judgment can be enforced by an action on the judgment for 15 years, counted from the date of the last execution issued on it. Each new execution starts the 15-year period again.
Source: KRS 413.090(1)

If you are sued

Answering a debt lawsuitFile a written Answer with the Circuit Court Clerk in the county named on the summons within 20 days after you were served (the count starts the day after service), and serve a copy on the plaintiff or its attorney with a certificate of service. If no Answer is filed, a default judgment may be entered. In small claims court no written answer is required, but you must appear at the hearing.
Collection agencies and assignees of claims may not file in small claims court (Small Claims Handbook P-6: https://www.kycourts.gov/Legal-Help/Documents/P-6_Small_Claims_Handbook.pdf).
Source: Summons form AOC-105; KRS 24A.230 (small claims)

Garnishment and what creditors can't take

Wage garnishment limitFollows the federal limit: no more than the lesser of 25% of weekly disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage. The limit does not apply to child support orders, Chapter 13 bankruptcy orders, or state or federal tax debts. An employer may not fire a worker because wages are garnished for one debt.
The court's wage-garnishment notice (AOC-150) states the weekly protected amount as the greater of 75% of disposable earnings or $217.50 (30 x $7.25). No Kentucky head-of-household exemption appears in KRS 427.010.
Source: KRS 427.010(2)-(3); KRS 427.140
Money protected in a bank accountNo general bank account exemption. Kentucky's exemption statutes protect specific property and funds (for example health savings accounts) rather than a set dollar amount in a bank account.
Federal benefits such as Social Security deposited directly into an account are protected under federal rules (31 CFR Part 212). The $1,000 general exemption in KRS 427.160 applies only in bankruptcy.
Source: KRS 427.010(1); KRS Chapter 427
Homestead exemptionUp to $5,000 in value in real or personal property the debtor or a dependent uses as a permanent residence (or a burial plot). It does not apply against a mortgage or purchase-money debt on the home, or if the debt existed before the property was bought or improved.
Source: KRS 427.060
Vehicle exemptionOne motor vehicle and its necessary accessories (including one spare tire), up to $2,500 in value.
KRS 427.040 (an additional vehicle up to $2,500, listed with professional libraries): https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=18543
Source: KRS 427.010(1); KRS 427.040
Claiming an exemptionTo challenge a wage garnishment, go to the Circuit Clerk's office that issued it within 13 days of the date on the paycheck the money was taken from, and file an Affidavit to Challenge Garnishment (AOC-150.2) stating what is exempt and why. The clerk sets a hearing; if you miss the hearing you lose the challenge to that withholding. The same affidavit is used for exempt money or property taken by other garnishments. Garnished money is held for 15 days after the employer's garnishment check is issued so exemptions can be asserted.
AOC-150.2: https://kycourts.gov/Legal-Forms/Legal%20Forms/150.2.pdf
Source: AOC-150 Notice of Rights to Assert Exemption; AOC-150.2; KRS 425.501
Bankruptcy exemptionsKentucky is not an opt-out state: a debtor may choose the federal bankruptcy exemptions (11 U.S.C. 522(d)) or Kentucky's own exemptions. Kentucky adds a $1,000 general exemption for debtors using the state exemptions in bankruptcy.
KRS 427.160: https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=18558
Source: KRS 427.170; KRS 427.160

Debt collectors and interest

Interest rate limitsThe legal interest rate is 8% a year. A judgment generally bears 6% interest compounded annually from the date it is entered, but a judgment on a contract, promissory note or other written obligation bears the rate stated in that document. On a written contract of $15,000 or less, parties may agree to no more than the lesser of 19% or 4% above the Federal Reserve discount rate.
KRS 360.010: https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=47989. The 6% judgment rate applies to judgments entered on or after June 29, 2017. Other laws (such as small-loan and credit-card statutes) can allow different contract rates.
Source: KRS 360.010(1); KRS 360.040

Where to get help in Kentucky

Debt & Collections FAQ

What is the statute of limitations on debt in Kentucky?
10 years to sue on a written contract signed after July 15, 2014. 15 years for written contracts signed on or before that date.
How long can a creditor sue on a credit card debt in Kentucky?
5 years for a contract that is not in writing (an oral agreement). Kentucky's statutes do not set a separate period for credit cards or open accounts.
How long does a court judgment last in Kentucky?
A judgment can be enforced by an action on the judgment for 15 years, counted from the date of the last execution issued on it. Each new execution starts the 15-year period again.
How much of my wages can be garnished in Kentucky?
Follows the federal limit: no more than the lesser of 25% of weekly disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage. The limit does not apply to child support orders, Chapter 13 bankruptcy orders, or state or federal tax debts. An employer may not fire a worker because wages are garnished for one debt.
How much money in a bank account is protected from creditors in Kentucky?
No general bank account exemption. Kentucky's exemption statutes protect specific property and funds (for example health savings accounts) rather than a set dollar amount in a bank account.
What is the homestead exemption in Kentucky?
Up to $5,000 in value in real or personal property the debtor or a dependent uses as a permanent residence (or a burial plot). It does not apply against a mortgage or purchase-money debt on the home, or if the debt existed before the property was bought or improved.
Can a creditor take my car in Kentucky?
One motor vehicle and its necessary accessories (including one spare tire), up to $2,500 in value.
What is the maximum legal interest rate in Kentucky?
The legal interest rate is 8% a year. A judgment generally bears 6% interest compounded annually from the date it is entered, but a judgment on a contract, promissory note or other written obligation bears the rate stated in that document. On a written contract of $15,000 or less, parties may agree to no more than the lesser of 19% or 4% above the Federal Reserve discount rate.
How do I respond to a debt collection lawsuit in Kentucky?
File a written Answer with the Circuit Court Clerk in the county named on the summons within 20 days after you were served (the count starts the day after service), and serve a copy on the plaintiff or its attorney with a certificate of service. If no Answer is filed, a default judgment may be entered. In small claims court no written answer is required, but you must appear at the hearing.
How do I stop a garnishment or claim an exemption in Kentucky?
To challenge a wage garnishment, go to the Circuit Clerk's office that issued it within 13 days of the date on the paycheck the money was taken from, and file an Affidavit to Challenge Garnishment (AOC-150.2) stating what is exempt and why. The clerk sets a hearing; if you miss the hearing you lose the challenge to that withholding. The same affidavit is used for exempt money or property taken by other garnishments. Garnished money is held for 15 days after the employer's garnishment check is issued so exemptions can be asserted.
Which bankruptcy exemptions can I use in Kentucky?
Kentucky is not an opt-out state: a debtor may choose the federal bankruptcy exemptions (11 U.S.C. 522(d)) or Kentucky's own exemptions. Kentucky adds a $1,000 general exemption for debtors using the state exemptions in bankruptcy.

Debt & Collections in other states

More Kentucky law

General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.