Expert: Mark J. Markus- California Bankruptcy Attorney - 8/30/2010

Question
Dear Mr. Markus:
We are in Marin County in California and considering filing Chapter 7 bankruptcy. In my research, we are qualified for Chapter 7. Also we can keep our house. (Zillow’s market value is higher than our mortgage balance, but adding an exemption of $75k, it looks ok.) We have already taken the required Internet class and the certificate will be valid until this November. Due to my wife’s illness, she will incur more medical debt. So, I am planning to file a chap.7 BK alone, as late as possible, perhaps just before November deadline of the course certificate and wait for her filing later(she will have to take the course again to get a new certificate in this case).
One of the credit card banks, with which I owe money, has litigated ( I received a Summon). I filed a General Denial. Their new attorney sent me a letter. It reads:”.. unless you dispute the validity of the debt within 30days, the debt will be assumed valid by this office..”. Should I respond or ignore? What would happen if I ignore? Would it make it too late to file Chap.7 BK?
Is it a good or bad idea to fax each bank I owe money a memo stating my intent to file chapter 7? It may not stop some of them from proceeding with law suits, but some may just drop pursuing?
Any suggestion will be greatly appreciated.


Answer
Disputing the validity of a debt has nothing to do with whether it's dischargeable in bankruptcy or not.  In fact, 99% of the time, there is no dispute.  You owe the money.  I don't know if faxing them memos regarding possibly filing a Ch 7 case is going to accomplish anything.  It might make them avoid filing a lawsuit but then again, it might make them speed up.  


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