However, that does not mean she will not face many challenges. Because her children have no legal obligation to help her make the payments, you can try to help her maintain control over the charges made on the card. As you know, your grandmother will be personally responsible for the entire debt. If she should fall behind on the payments, she will be the one getting phone calls and nasty letters from collection agencies, not her children.

One of the creditors (or a collection agency) might sue her. If she did get sued, then she would be taking a risk by continuing to have her Social Security check deposited directly into her bank account. Once the creditor obtains a judgment and receives court approval, the money in your grandmother's bank account can be levied (taken to pay a debt) at any time with no advance notice. Even though Social Security funds are exempt from creditor claims, the bank will adhere to the court-ordered levy and your grandmother will have to immediately file the appropriate paperwork with the court to get those funds back.

Also, since she recently declared bankruptcy, she cannot file Chapter 7 bankruptcy again for another eight years. She may have her bank account repeatedly levied and she may have liens placed on any property she owns (including her home).

Best case scenario: Her kids who are helping her run up the bill also make the payments on time and she is able to carry a balance but stay current on the cards. It is hoped she will maintain control over the cards and avoid missing payments and incurring late charges or exceeding her credit limit and incurring over-limit fees, which will cause her interest rate to shoot up.

Unless your grandmother has learned her lesson from her recent experience with bankruptcy (and it doesn't sound like she has), it is likely that she will end up in financial trouble again. However, she is a grown woman and must be allowed to make her own decisions -- unless she is legally incompetent to handle her affairs. If you truly believe this to be the case, and that she is being taken advantage of by her children (and this is probably true, given the fact that she cannot understand the applications she is signing), then you should look for local elder abuse organizations or law firms in your area.

Justin Harelik is a practicing attorney in Los Angeles. To ask a question of the Bankruptcy Adviser go to the "Ask the Experts" page, and select "bankruptcy" as the topic.