{"data":{"id":"us-ky/krs-355.4a-502","jurisdiction":"us-ky","citation":"KRS 355.4A-502","heading":"Creditor process served on receiving bank -- Set-off by beneficiary's","body":"bank.\n(1) As used in this section, \"creditor process\" means levy, attachment, garnishment,\nnotice of lien, sequestration, or similar process issued by or on behalf of a creditor\nor other claimant with respect to an account.\n(2) This subsection applies to creditor process with respect to an authorized account of\nthe sender of a payment order if the creditor process is served on the receiving bank.\nFor the purpose of determining rights with respect to the creditor process, if the\nreceiving bank accepts the payment order the balance in the authorized account is\ndeemed to be reduced by the amount of the payment order to the extent the bank did\nnot otherwise receive payment of the order, unless the creditor process is served at a\ntime and in a manner affording the bank a reasonable opportunity to act on it before\nthe bank accepts the payment order.\n(3) If a beneficiary's bank has received a payment order for payment to the beneficiary's\naccount in the bank, the following rules apply:\n(a) The bank may credit the beneficiary's account. The amount credited may be\nset off against an obligation owed by the beneficiary to the bank or may be\napplied to satisfy creditor process served on the bank with respect to the\naccount.\n(b) The bank may credit the  beneficiary's account and allow withdrawal of the\namount credited unless creditor process with respect to the account is served\nat a time and in a manner affording the bank a reasonable opportunity to act to\nprevent withdrawal.\n(c) If creditor process wit h respect to the beneficiary's account has been served\nand the bank has had a reasonable opportunity to act on it, the bank may not\nreject the payment order except for a reason unrelated to the service of\nprocess.\n(4) Creditor process with respect to a pay ment by the originator to the beneficiary\npursuant to a funds transfer may be served only on the beneficiary's bank with\nrespect to the debt owed by that bank to the beneficiary. Any other bank served with\nthe creditor process is not obliged to act with respect to the process.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33587","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:45Z","sha256":"7ca3249d6cb27686c1791dbaef01be731d74cc620036b0a5da3f6fd1f41875eb","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.4a-501","next":"us-ky/krs-355.4a-503"},"notice":"GroundRules: Original legal text. Not legal advice."}