Kentucky Demand Letter

Introduction

Key Things to Know

1. 1

   Kentucky does not require a demand letter before you sue for an unfair or deceptive practice under the Kentucky Consumer Protection Act, but if your claim involves a check that was dishonored for insufficient funds, Kentucky Revised Statutes Section 514.040 requires a written demand mailed to the address on the check, deemed received 7 days after mailing, giving the maker 10 days after receipt to pay; failing to pay only creates a presumption of criminal intent under that criminal theft-by-deception statute, not a civil remedy.

2. 2

   State your demand in specific numbers. Name the exact amount owed, the contract, invoice, or dishonored check it comes from, and a firm deadline to pay or act.

3. 3

   Kentucky's Small Claims Division of the District Court hears claims up to $2,500, exclusive of interest and costs, under Kentucky Revised Statutes Section 24A.230(1). Unlike most states, a business primarily or secondarily engaged in lending money at interest or a collection agency may not sue there, under Section 24A.240(3), though an individual attorney is otherwise permitted to appear.

4. 4

   Mind Kentucky's statute of limitations: 10 years to sue on a written contract signed after July 15, 2014 under Kentucky Revised Statutes Section 413.160, or 15 years if the contract was signed on or before that date under Section 413.090(2); 5 years on an oral contract or a merchant's account for goods sold and delivered under Section 413.120; and 2 years for damage to personal property under Section 413.125.

5. 5

   Interest on money owed accrues at 8 percent a year by default under Kentucky Revised Statutes Section 360.010, running from the default date your contract fixes rather than from the date of your demand letter. A written contract can set a higher rate, capped at 4 points over the 90-day Federal Reserve discount rate or 19 percent, whichever is less, if the original principal is $15,000 or less; a written contract's rate continues through judgment under Section 360.040(3).

6. 6

   If your contract contains a written attorney's fee clause, Kentucky Revised Statutes Section 411.195 makes it enforceable on default, but Kentucky has no separate presentment-notice requirement; without a written fee clause, each side ordinarily bears its own attorney's fees.

7. 7

   Keep the tone firm and factual, not threatening. Do not threaten arrest, jail, or criminal prosecution to collect a civil debt. Kentucky's Consumer Protection Act bans unfair, false, misleading, or deceptive practices under Kentucky Revised Statutes Section 367.170, though it does not itemize specific prohibited collection tactics the way some states do.

Kentucky Requirements for Demand Letter

• Dishonored-Check Notice Under a Criminal Statute

  Kentucky Revised Statutes Section 514.040, the criminal theft-by-deception statute, requires a written notice mailed to the address on a dishonored check, deemed received 7 days after mailing. If the maker does not make good within 10 days of receipt, by paying the face amount plus a handling fee capped at $50, that failure only creates a presumption of criminal intent, not a civil remedy for the holder.

• No Civil Treble Damages on a Bad Check

  Unlike states with a private multiplied-damages statute for a dishonored check, Kentucky's recovery under Section 514.040 is limited to the check's face amount plus a merchant's posted handling fee, not to exceed $50. A county attorney administering a bad-check program may separately charge the maker a $50 fee once the instrument is paid.

• No KCPA Pre-Suit Notice Requirement

  A private action under the Kentucky Consumer Protection Act needs no notice to the defendant before filing, under Kentucky Revised Statutes Section 367.220(2), which instead requires the court clerk to mail the Attorney General a copy of the complaint after it is filed.

• Lenders and Collection Agencies Barred From Small Claims

  Kentucky Revised Statutes Section 24A.240(3) bars a business primarily or secondarily engaged in lending money at interest, and any collection agency or collection agent, from suing in the Small Claims Division to further that business.

• Small Claims Limit and Attorneys Permitted

  Kentucky's Small Claims Division of the District Court hears claims up to $2,500, exclusive of interest and costs, under Kentucky Revised Statutes Section 24A.230(1). Kentucky permits an attorney to appear in small claims under Section 24A.240(1).

• Statute of Limitations Turns on Contract Signing Date

  A written contract signed after July 15, 2014 gets 10 years to sue under Kentucky Revised Statutes Section 413.160, while one signed on or before that date gets 15 years under Section 413.090(2). An oral contract or a merchant's account for goods sold and delivered gets 5 years under Section 413.120, and damage to personal property gets 2 years under Section 413.125.

• Interest Runs From Default, Not From the Demand Letter

  Kentucky Revised Statutes Section 360.010 sets the legal rate at 8 percent a year, accruing from the contract's default date rather than from the date a demand letter is sent. A written contract of $15,000 or less in original principal may set a rate up to 4 points over the 90-day Federal Reserve discount rate or 19 percent, whichever is less.

• Attorney's Fee Clause Requires a Writing

  Kentucky Revised Statutes Section 411.195 makes a written contractual clause requiring the debtor to pay the creditor's attorney's fees on default enforceable, with no separate presentment step. Without a written fee clause, Kentucky follows the American rule and each side bears its own fees.