In the letter they stated that they may send her to a lawyer if they don't receive a payment within 20 days. We live in the state of CA. Is this realistic?
Yes, this is realistic. The debt collection is trying to see if your wife will voluntarily make payment of the credit card debt owed. If not, then the debt collector will hire an attorney to file a collection lawsuit.
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Lawsuit / Dispute Attorney
it is possible that they will hire a lawyer in California who may contact you or file a debt collection lawsuit against her for the balance due. Their demand for $7,000 within 20 days is UNREALISTIC for most consumers during a recession. You need to decide if you want to deal with a debt collection lawyer and court costs, if they carry out their threat.
If you believe that this debt collection company does not have the right to collect this debt, then send my sample letter 1.1 to this agency within 30 days of receiving the letter. Also, their letter demanding payment within 20 days may violate the Fair Debt Collection Practices Act, which requires their initial letter give you 30 days to request the debt be validated. See link below to my web site of sample letters.
If she is sued, you should contact a debt collection defense attorney, or they may end up with a judgment for the full balance plus interest, attorney's fees, and court costs. I handle such cases for consumers throughout California state courts.