Bankruptcy For $4K?

I posted this earlier on a PF message board, just wanted to see if anyone out there had anything to add:

My sister came to me today (over the phone) saying that she's in debt and thinking of declaring bankruptcy. I asked her for how much, and she said she owes $4k. That's all--Four thousand dollars. I told her not to--that seems like such a small sum to mess up your life for 7 years--but I wanted to see if anyone else had better advice or could think of a reason why she SHOULD. She has some mitigating circumstances:

She's severely bipolar and lives in a group home. She gets disability $$, but her group home takes all her disability money to run the home. I think she gets like $20 a week as an allowance. Every year, her cocktail of meds stops working, and she's committed to a mental hospital for 6-8 months. When she's in the hospital, of course, the disability money goes to the hospital. When they finally figure out another cocktail that works, she does ok for a few months. For a few months a year ago, she actually had a part-time job and lived by herself. However, that ended when her meds stopped working again, and she lost that job and apartment.

Her case manager and therapist are both saying that she should not and cannot hold down a job in order to pay down this debt. They helped her consolidate her debts, and her payment would be $122/mo. My parents have bailed her out many, many times, and she hates that. She says that when she's manic after her meds stop working (before she goes to the hospital), she really just can't control her spending; it's like she's another person. She has cut up all her credit cards, but they keep sending her new ones (WHY??). Hopefully, my parents will not pay this again, my dad is also disabled and my mom makes very little as a social worker--she's already going to have to delay her retirement by at least a decade due to the recession and so my dad is covered by her health insurance.

So...aside from bankruptcy...are there any other options that you can think of? What could happen if she doesn't pay these debts? Is the worst thing that could happen is that her credit is shot (it's already down the tubes...this cycle keeps happening, but my parents keep paying her debts)?

She wants to get a job but I think her case manager and therapist just aren't going to allow it.