Kentucky B2B Debt Collection Rules
Kentucky is a major manufacturing, automotive, and logistics hub with a growing technology sector. Collecting unpaid B2B invoices requires compliance with the Kentucky Collection Agency Act, regulated by the Department of Financial Institutions (DFI).
Key distinction: The federal FDCPA does not apply to B2B debts. Kentucky's Consumer Protection Act has limited B2B application, but commercial collectors must avoid deceptive and harassing practices under Kentucky common law and the Kentucky Collection Agency Act. Kentucky has a generous 10-year written contract SOL.
How Long You Have to Collect
Kentucky Revised Statutes — Limitation of Actions
The statute of limitations determines how long a creditor has to file a lawsuit to collect a debt. Once expired, the debt is not forgiven — but it becomes unenforceable through the courts.
| Contract Type | Time Limit | Code Section |
|---|---|---|
| Written contract | 10 years | KRS §413.160 |
| Oral contract | 5 years | KRS §413.120 |
| Open account (invoices) | 5 years | KRS §413.120 |
| Account stated | 5 years | KRS §413.120 |
| Promissory note | 10 years | KRS §413.160 |
Important: The clock starts from the date of the last activity on the account — typically the last payment or invoice due date. A partial payment or written acknowledgment can restart the clock.
Who Needs a License
Kentucky Department of Financial Institutions (DFI)
Kentucky requires third-party debt collectors to be licensed under the Kentucky Collection Agency Act, regulated by the Kentucky DFI.
- Third-party collectors must hold a Kentucky Collection Agency license
- Original creditors collecting their own debts generally do not need a license
- License requires application, background check, and bond with Kentucky DFI
- Annual renewal required
- Violations can result in license revocation, fines, and civil liability
How AgentCollect Handles This
- AgentCollect operates under its own Kentucky DFI license — you don't need to obtain one
- Our partnered attorneys are licensed and barred in Kentucky
- All communications include required disclosures
- Licensing status is verified and renewed annually
Laws That Apply to B2B Collections
Kentucky Consumer Protection Act
The Kentucky Consumer Protection Act (KRS §367.110 et seq.) primarily applies to consumer transactions. However, its prohibition on unfair, false, misleading, or deceptive acts informs professional standards for all collection activity.
- No false or misleading representations about the debt or legal status
- No threats of legal action not intended to be taken
- Kentucky AG can investigate commercial deception complaints
- Professional conduct standards apply to all collection communications
UCC Article 2 — Commercial Transactions
The Uniform Commercial Code governs most B2B transactions in Kentucky, treating both parties as sophisticated commercial entities.
- Governs sale of goods between businesses
- Allows contractual modification of remedies and limitations
- Permits higher interest rates than consumer transactions
- Commercial reasonableness standard applies
Automatic Kentucky Compliance
| Requirement | How AgentCollect Handles It |
|---|---|
| Contact hours (8am–9pm ET) | AI agents auto-detect timezone from area code. Never calls outside permitted hours. |
| Validation notice | Automatically sent within 30 days of first contact with all required disclosures. |
| Statute of limitations | Accounts past applicable SOL are flagged and handled with modified approach. |
| Kentucky DFI licensing | AgentCollect holds its own Kentucky license. Clients don't need to obtain one. |
| Cease-and-desist | Immediately stops all contact. Account moved to legal review queue. |
| No deceptive practices | All AI communications are truthful, accurate, and professionally calibrated. |
Kentucky B2B Debt Collection FAQ
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