They should get a fee waiver from the court and then file an Answer. Although poverty is not a defense on the merit in a credit card collection suit, the creditor will not be able to collect anything. Therefore, do not pay a penny to the collector. You may want to meet with an attorney for more specific advise and for assistance in filling out the court forms, but you do not want to file BK, or to go to that expense. Some BK attorneys offer "free" consultations in order to give you a sales pitch for their bankruptcy services, so you might not want to go to a BK attorney.
If your parents are indeed in the situation you state, only social security income and no assets, they are essentially judgment proof. As counsel posted, this is not a defense to the lawsuit but it will make collection by the debt collector extremely difficult or impossible. There may be some benefit to defending the lawsuit but you should consult with an attorney for further details.
There is no point in filing an answer to the lawsuit if they do not dispute it. They do sound like they are "judgment proof". However, if they own a home, a judgment lien could be recorded against it. They should meet with an experienced bankruptcy attorney right away. Some Bankruptcy Courts offers clinics for low income debtors. Check with your local bankruptcy court to see if they offer any assistance to low income debtors in your area.
Nothing in this response should be construed as legal advice, or establishing an attorney-client relationship.