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The 'BK' Indicator

I'm sitting inside bankruptcy court in LA's San Fernando Valley, awaiting a hearing on the case of baseball legend Lenny Dykstra.

Every race, creed, color and income level is represented here. The Mercedes in the parking lot aren't all being driven by the lawyers.

This place is a hive of activity, as lawyers busily explain to clients what to expect in court, and what their options are. "Stop paying", says one attorney to a client. I assume she means something like "stop paying the mortgage", not "stop paying me."

Nationally, personal bankruptcy filings in July were up 34 percent from a year earlier and at the highest level since bankruptcy laws were reformed in 2005.

The good news, bankruptcy is considered a lagging indicator. The bad news...well, it's only bad news for those crowded in this courthouse today. Some are in suits, some are in jeans, all look sad.

CNBC.com Slideshow: America's Biggest Types of Personal Debt

But it is entertaining.

One guy, who calls himself an investigator who has fallen on hard times, regaled me with "evidence" that O.J.'s adult son, Jason, "is the real killer."

Oh wait, Lenny just got here. He says he has a reality show in the works. Stay tuned...

  • Check out our tour of Lenny's House

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