Legal Question in Bankruptcy in California

I received a letter from a lawyer regarding credit card debt. I have outstanding debt with two creditors that I haven't been able to pay almost 2 years. I received tons of calls and correspondence by mail. I even talked to them at one point to work something out and the only option they gave me was still something I couldn't afford. Eventually one of the creditors called my sister. At that point, I told them to not contact me or anyone else in matters concerning me. I haven't heard anything from either creditor for about a year. On June 20th, I received a letter from an attorney saying that their client "has engaged this law firm to attempt to collect the outstanding balance due on your account". The letter said that I have 30 days after I received the letter to "dispute the validity of the debt or any portion of it. I don't have the funds to pay any of this debt now. However I'm currently waiting for a settlement from a car accident. It won't be near enough to pay the debt that I have, but I'd probably be able to pay something. That being said, I'm not sure how to respond to the lawyer. I don't want to be sued in court, especially if I might be able to work something out, but that can't be done before the 30 day time period they gave me. I've also considered bankruptcy and that's still on the table. What would you advise that I do in the meantime to meet their 30 day requirement. I appreciate your time and assistance.

**Something I wanted to note: I received the letter on May 20th, 2016, but the letter was dated May 14th, 2016 and wasn't postmarked until May 17th, 2016. I'm not sure when they consider the 30 days to have begun.

Asked on 6/09/16, 8:29 pm

1 Answer from Attorneys

Dennis Winters Winters Law Firm

The 30 day "deadline" in the letter is a requirement of the Fair Debt collection law that requires debt collectors, including lawyers, give people 30 days to contest the debt, and require the collector provide back up documentation, it does not mean a lawsuit will necessarily be filed right after the 30 days expires. More likely is another round of demands and telephone calls first.

If this is your only debt issue, you may want to hold off considering bankruptcy at least until any lawsuit is filed and served. Just because they turned it over to an attorney does not mean they will actually file the lawsuit.

You may want to make an offer once you know when and how much you will be getting on the settlement, but be aware, it is likely the settlement you expect would be fully exempt in bankruptcy, so offering it all to pay the debt might be unnecessary if you are willing to file the bankruptcy.

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Answered on 6/10/16, 11:00 am

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