YBK [The Sequel]: One inevitable result of the pre-YBK panic was that new filings after October 17 would all but disappear. The Washington Post confirms that in the first month since the new law went into effect, the number of new cases went from nearly three-quarters of a million in the two weeks preceding YBK, including just under a half-million in the final week, to about 3,000 cases a week since then. Prior to the signing of the bankruptcy "reform" act, a typical week saw about 30,000 cases. After the run on the courts in October, it is a welcome break for those of us who make our living in this area; we are having a hard time just filing the amendments, attending the hearings, and, in the case of Trustees, adminstering the assets that are required under the old law, without having to think about what we should be doing with new clients.

The scuttlebutt around the local courts is that the new cases are being disproportionately filed in pro per (that is, without benefit of legal counsel), using forms that are out-of-date and without adherence to any of the new requirements, such as mandatory credit counseling, mandated by the new law. Therefore, many of the cases included in the total are going to get dismissed. That will lower the new total even further, but many of those debtors are still going to have a need to discard their debts, so I expect to see some of these people in my office next month. The end of the old law cleared the decks, as it were, but the problems with the economy remain.

Indeed, even now the numbers of new filings are beginning to go back up again. YBK motivated a lot of people who had been procrastinating to file at the last minute, most of whom never would even considering the need to file. The new law creates a few more hoops to jump through, and increases the paperwork to successfully file a new case, but it doesn't eliminate the problems of out-of-control revolving credit, or of delinquent mortgage or car payments. In a matter unrelated to YBK, monthly credit card payments are going to increase significantly in January, and the housing bubble has already begun to burst in certain areas of the country. Bankruptcy attorneys have had years to prepare for this lull, and the explosion in business last month has bought us time. And a fair number of people who didn't file in October now have the bug planted in their ears.

Prediction: anticpate a sizeable increase after the holidays, and a restoration of the old weekly norms by the end of 2006.