YBK [Part 21]: Although the underlying reasons for bankruptcy usually range from medical disasters to job losses, the canaries in the coalmine are usually defaulted credit cards and lagging home sales. The first event indicates that a person is no longer able to keep current on his borrowing, while the second means that the indebted is finding it harder to use the equity on his home to pay off his debts. So, here's some miscellany to consider as we head into October 17:

1. According to the American Bankers Association, the number of credit card holders that were at least 30 days delinquent on their accounts rose to 4.81% in the quarter ending in June, setting an all-time record.

2. Home sales dropped precipitously in August, falling 9.7% from its record total in July. Consumer confidence also plunged: in the 30-days ending September 20, the consumer confidence index fell nearly 20 points, a drop larger than what resulted from the September 11 attacks.

3. A personal observation. I practice law in the Central District of California, which has been the national pacesetter for bankruptcy filings since the early-90's. In recent years, the number of filings, which peaked around 1997-8, have been declining, even as the numbers have gone up everywhere else, and even the signing of the new law didn't spark as dramatic a rise as we've seen elsewhere.

That is now changing. Lines to file new petitions are snaking through the Federal Building downtown, even though the new law isn't scheduled to go into effect for three weeks. Chapter 7 filings for August were up 30% for the month over the same time last year. Los Angeles has seen its fair share of Katrina survivors, many of whom are too far away to use the courts in their home district, so potential efforts to obtain debt forgiveness may occur in our local bankruptcy court as well. The closer we get to October 14, the more similar those lines are going to be to the lines at the post office on April 15 every year. Yikes.

As a practicing attorney, I file my cases electronically, so I don't wait in line, and usually expect to receive confirmation from the court that a case was filed successfully a few hours after I transmit the package to the court. Thanks to the backlog, it now takes 2-4 days to get confirmation. Since a rejection by the court of any bankruptcy petition might soon be tantamount to legal malpractice if the YBK deadline is missed, that's a very scary prospect for me and other local professionals.