Bankruptcy
 

A cousin of mine is bipolar and has lapses of psychosis where his perception of reality is extremely skewed. He will think he has a Ferrari and that someone stole it from him for example.

He has no savings but has a credit card and has been maxing it out and only making the minimum payment if that. As of now he's at about $3500 in debt. My aunt helped him pay off his card twice in the past and is considering doing it for a third time but I suggested that filing for bankruptcy may be an option. He's not working right now since he was just admitted to the hospital for his mental disorder.. his psychosis is so extreme that I don't think he has any concept of money management or debt.

From what I understand if he were to file for bankruptcy they would sell his assets - what does this include? He has a phone, an ipad, some headphones and clothes so will they typically take everything?

What are the negatives of this? I understand that his credit will be shit but I think that would be fine since he shouldn't borrow any money or have a credit card in the first place.

$3500 isn't a huge sum but this would be his third time so it's not a small burden for a single mom.

Anyone have experience with bankruptcy?

$3500 isn't worth going bankrupt for... Help him get cut off from credit cards completely, get a debit visa, and tell him to get a summer job to pay off the debt.

If you're advising him to file for bankruptcy for $3500 then I really don't think you should try to help this guy out.

First off, no one should be helping him pay for his debts. Go big or go home. If eventually the road will lead to bankruptcy, your friend should apply for more cards, get higher limits, and max out on whatever loans he can get. Your buddy obviously has no assets to worry about.

If he really has psychological problems then it would be hard to convince him of doing the right thing like what SkinnyPupp suggested.

I think it is better to:

1.Get his mom to apply public guardianship over your cousin, so he can't apply for cc by himself anymore.
2. Cut up his credit card.
3. Get his mom to pay it off the card bill.
4. Talk to a psychiatrist and get him help, either social security / disability.

If you really want to help, contribute to the payoff and legal costs. Telling him to declare bankruptcy is idiotic, but I guess that's the only thing you know.

Declaring bankruptcy over $3,500.00 in debt is like writing off your car because it has a rock chip in the windshield.

If his debt was 20-30k and he wasn't working, then ya bankruptcy might be his best option. But since it's only $3500, his mom could probably work with a debt counsellor for him and work out a settlement with the CC company. Also, godwin has the right idea. Make sure he can't apply for anything by himself anymore if he isn't stable.

Trust me, bankruptcy for $3500 isn't worth the headache. And quite frankly, any trustee who isn't a scam artist will tell you the same thing that's been said here.

the bigger issue here is the fact that the guy needs help in so many facets of his life. first of all one should remove his credit card.

as has been said before, bankruptcy over $3.5K - are you fucking kidding me? ruin his credit for years and years over $3.5K? maybe you're the one that needs help!