Update:
Ok, I got my friend, Lo, to call Legal Aid. She spoke with a woman who instructed her to Google 'answer Michigan court'. The website had instructions for filing and serving an answer to the complaint. (Form MC 03) It appears to be fairly simple and can be filed via first class mail as well. Also, she was instructed to open a separate checking account from where her SSI is directly deposited. I didn't think this made sense. I told Lo to call SSI and cancel the direct deposit for now. She did. I told her that currently there is no risk of them wiping out her account since they have yet to get a judgment.
Still, Lo didn't get an answer as to whether or not she should file for bankruptcy. I'm assuming that these legal aid lawyers aren't able to practice in a federal court. I have to get Lo to a bankruptcy attorney. In the meantime, we have time once the answer is filed.
The stress of this stuff gives Lo seizures. It's a worry.
WF
There is bankruptcy help available through legal aid, depending on which of the organizations your friend called for help. The link I provided had many Oakland County resources listed.
Your friend will not get an answer on whether to file for bankruptcy or not over the phone, just as she cannot get that answer from us. As I said earlier, her entire financial situation needs to be personally reviewed by an attorney in her area to determine if bankruptcy is her best course of action. With $30,000 in debt - and the odds of more lawsuits in the future over these debts relatively high - bankruptcy could make sense, although Bigun makes a legitimate point. Ultimately, it will depend on the facts specific to your friend and her making an informed decision after consultation with a bankruptcy attorney.
If she is getting help from a legal aid organization and speaking with an attorney through this organization, it is best if you step back and do not advise her any more. If a judgment is obtained, it is up to your friend to let the court know that the separate account opened for SSI deposits has SSI deposits only and is exempt from collection efforts. It is not up to the bank to determine what can be seized and what cannot. The bank will obey any order coming from the court.
If a legal aid attorney suggested she have her SSI deposited in a separate account, she should open a separate account and have these funds directly deposited into it.
Again, there are many legal aid organizations listed at the link I provided, and there are numbers to call for pro bono help. I understand that your friend is overwhelmed but she is not going to solve her problems unless she becomes more active in seeking the help that is available. You can help by transporting her to an appointment with one of the lawyers available to help her, after she makes an appointment (which is something she should do before her court appearance).