Troubled economic conditions generally result in faltering finances for people as well as businesses. As a last resort -- and sometimes before the last domino falls -- people and companies declare bankruptcy, a maze of rules and regulations that try to balance the financial plight of those filing with the needs and rights of creditors entitled to recompense for money loaned.

Motley Fool Hidden Gems selection EPIQSystems (NASDAQ:EPIQ) helps the middlemen in the bankruptcy process, usually trustees of the court, track and manage a case as it winds its way through the system. It provides software and services that assist in processing or "running" the case, as well as document management to ensure timely notification and filings to all involved. EPIQ has found itself in the forefront of the industry and is the only publicly traded company providing such products and services.

Even so, those conditions did not lend themselves to a particularly stellar third quarter, as revenues were down 10% from a year ago, dropping to $32 million from $35.7 million. The primary reason for the decline was that revenues from EPIQ's document management segment fell 37% from last year, even as case management, with its higher profit margins, rose 9%. Net income rose 33% as earnings climbed to $3.1 million, or $0.16 per share, against last year's $2.9 million, or $0.15 per share.

Revenues all year long have been flat from one quarter to the next, but the company expects a surge of business in the fourth quarter because the recently enacted Bankruptcy Abuse Prevention and Consumer Protection Act caused a groundswell of filings before the Oct. 17 deadline had passed. The law will force more filers to choose Chapter 13 bankruptcy over the more lenient Chapter 7. EPIQ reported that some areas of the country reported about 8% to 10% more filings than normal.

In addition to the increased business expected from bankruptcy reform, EPIQ has also been selected to handle both Delta Airlines and Northwest, the eighth- and 16th-largest bankruptcies ever, respectively. The size and complex nature of these bankruptcies should provide the company with an increased, steady stream of business.

The third-quarter results caused EPIQ's stock to drop 14%, though shares still remain 11% above where they were recommended in Hidden Gems at the end of July. In the fourth quarter and the first quarter of 2006, though, EPIQ should return to the less mundane results it reported last year.

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Fool contributor Rich Duprey does not own any of the stocks mentioned in this article. The Motley Fool has a disclosure policy.