Kentucky’s 60 year Debt Collection Statute of Limitation
Recently we were asked a question on Avvo about whether a debt collector could collect on an overdrafted checking account after 7 years. The bank had a checking account with a customer who ran up check charges. USAA bank was holding him accountable for overcharges on a checking account from 1998, 1999, and 2006. He asked if there was a consumer law which held him accountable after such a long period of time: This presented two different interesting questions first on whether he could get a second checking account and also whether the bank could collect and the statute of limitations.
The statute of limitation in Kentucky for a written contract is 15 years Ky. Rev. Stat. § 413.090 . If you are sued within that 15 years the plaintiff will normally obtain a judgment. A judgment can be used to collect for another 15 years and it can be renewed for another 15 and again another 15 years after that Ky. Rev. Stat. § 413.090. This is Kentucky’s 60 year Debt Collection Statute of limitation to collect for a debt. That is why bankruptcy is so important as an option. This is how most states operate. If they file a judgment lien against your property you will have to file a bankruptcy to strip the lien or pay it if you wish to sell the property. An oral contract only has a 5 years statute of limitations Ky. Rev. Stat. § 430.120(1) but there are very few oral contracts.
Statutes of limitations can be as short as 3 years depending on the state you live in. When a debt is generally not dischargeable in bankruptcy such as a private student loan it can be a reason for moving to another state. These Statutes of limitations are different for written and oral contracts. Some debts such as federal student loans have no statute of limitation time limits. You always have to look at the law in your state to determine how long these periods are. In Indiana the statute of limitations is 10 years for a written contract.
If a collector attempts to collect a debt after the statute of limitation expires you almost always have an FDCPA case against the collector. However a fair debt collection practices act case requires that you file the lawsuit against a bill collector. The original person you owe the money to may still attempt to collect the debt years after the SOL (Statute of Limitations) has expired.
Banks have a special reporting service and generally will not give you another account until you have paid the overdrafts on a prior account with another bank. After 7 years you should be able to get another account with another bank and there are second chance checking accounts that you can get before the 7 year lockout period. There are ways around this. Since you have not been sued by now I doubt that you ever will be sued for this but you need a way to start life over.
With the exception of some very minor theft cases there is no statute of limitation in Kentucky for criminal acts.