YBK [Fin]: As expected, the legacy of the new bankruptcy law will be the manner in which ordinary people across the country reacted in the past few weeks. What had been a slow but significant increase in filings in the immediate aftermath of the new law's passage became a cataclysmic disaster last week. Since many of the filings are done electronically, the long lines outside the courthouses on Friday give no indication of the true sign of the numbers of people who filed, but don't be surprised if the final numbers are close to what typically appear over a span of a couple of months. If the people who called my office are any indication, most of them never would have even considered the possibility of filing bankruptcy, had it not been for the new law.

The conservative business paper Investor's Business Daily reports that credit card companies, the prinicipal backers of the new law, are finally beginning to realize that they may have been screwed by their lobbyists:

Ray Bell, vice president of Creditors Interchange and host of an upcoming industry meeting on bankruptcy, said he fears some credit card firms haven't studied the fine print of the new law, which could be changed via lawsuits in the courts, he said.

"The credit card industry isn't necessarily prepared for what's coming," Bell said. "We're going to have court rulings to the north, south, east and west. Interpretations will vary ... Uncertainty may hit the credit card industry - they have not taken the time they needed to do to manage the process that's coming."

(snip)

While the impact isn't likely to cripple any credit card companies, analysts have been playing a parlor game of sorts to assess the effects.

Wachovia analysts recently changed their rating to market perform from outperform on Capital One, partly on concerns about bankruptcy filings.

"While Capital One's recent credit results indicate relative stability, we are growing increasingly concerned about the outlook for consumer credit," the analysts said in a report.

Wachovia said rising energy prices, increased bankruptcy filings and weakening consumer sentiment in the last few weeks are "a troublesome trifecta."

Similar horror stories are reported in the article, which was clearly written before the last-minute explosion, about AmEx and CitiGroup. Although it couldn't have happened to a nicer bunch of sharks, the impact on the rest of us could be even worse, as we have to put up with higher monthly rates and more aggressive collection activity to make up for the huge loss in revenues from YBK.