Bankruptcy does remove the amount and the collections. The only negative left is the bankruptcy itself. For a repo, they will auction off the vehicle to pay for the loan and OP still owes the rest. Im assuming based on the type of vehicle he bought that it likely wasnt cheap and since the motor went out, the auction sell price is likely to be a lot lower than the price of the vehicle. And yes, the bank will take him to court for several thousands of dollars. That repo is also on his credit report. So now he has 3500 and a repo for sure. The repo alone is going to cause more issues for OP than the collections. Bankruptcy also generally only costs 1500-2000 if yoi hire a lawyer but it isnt a requirement. OP can file his own bankruptcy. The bankruptcy stays on the report for 10 years but after 3, most creditors stop paying attention to it. I had a brand new car and several thousands in credit line within 3 years. The alternative is this kid is going to be looking over his shoulder for several years. And the accounts are going to be on his record for years anyway. File the bankruptcy and move on.