Debt-Fueled Spending and Rising Legal Stress, Research Reveals

If it feels like Americans are stretched thin right now, the data agrees and the calls for help are growing louder. The Q2 results of the Consumer Stress Legal Index (“CSLI”) show a clear thread running through the numbers: rising consumer debt is fueling financial stress, and consumers are turning to lawyers for help navigating it.

The Consumer Stress Legal Index is built on approximately 150,000 real-time legal service requests each month. LegalShield’s network of provider law firms tracks calls about financial concerns such as foreclosures, bankruptcy, debt collection, and builds indices that have consistently predicted government-reported data weeks, even months, in advance.

“We’re a leading indicator,” said Matt Layton, Senior Vice President of Consumer Analytics at LegalShield. “We’re answering calls today from people who woke up this morning worried about their financial condition.”

A four-month climb in consumer stress

“The CSLI itself is up four months in a row now,” said Layton. “We’re hitting the highest we’ve seen since November 2020.” That’s no small comparison. 2020 marked the height of COVID-era uncertainty, and today’s stress levels are echoing that crisis.

What’s driving the increase?

• The Foreclosure Index is up 30% year-over-year—“the largest jump we’ve seen in over three years,” Layton noted.
• The Consumer Finance Index is up 9% quarter-over-quarter, reflecting surging calls around late payments, billing disputes, and loan modifications.

In other words, the LegalShield consumer stress legal index is telling us that people are struggling to pay their bills and they’re reaching out to lawyers to understand their options.

“The house is the last bill you don’t pay”

LegalShield’s Foreclosure Index was a leading indicator of actual foreclosure flings in Q2 2025.

LegalShield’s Foreclosure Index surged 30% year-over-year in Q2, a steep jump not seen in over three years, indicating a sharp rise in homeowners seeking legal help amid rising mortgage strain, according to Layton.

A four-month climb in consumer stress

“The CSLI itself is up four months in a row now,” said Layton. “We’re hitting the highest we’ve seen since November 2020.” That’s no small comparison. 2020 marked the height of COVID-era uncertainty, and today’s stress levels are echoing that crisis.

What’s driving the increase?

The Foreclosure Index is up 30% year-over-year—“the largest jump we’ve seen in over three years,” Layton noted.

The Consumer Finance Index is up 9% quarter-over-quarter, reflecting surging calls around late payments, billing disputes, and loan modifications.

In other words, the LegalShield consumer stress legal index is telling us that people are struggling to pay their bills and they’re reaching out to lawyers to understand their options.

As a LegalShield provider lawyer in Alabama and Mississippi, Ben Farrow is hearing firsthand from people trying to keep their homes. “Your house is your house,” Farrow said. “You can cut back on food or drive an older car, but you’ve got to have a place to live.”

Farrow describes a growing number of clients asking how to keep up with mortgage payments, or what legal protections they may have. “It’s usually your biggest monthly expense, and as the consumer stress legal index shows, they’re definitely feeling it.”

Spending continues, but so do delinquencies

There’s a paradox in today’s economy: consumers are still spending. Travel is up. Retail is up. Airlines are reporting record earnings.

And yet, the debt behind that spending is building up quickly. And the consumer stress legal index indicates that people don’t know how to get out of the financial rut that they find themselves in.

“People feel trapped,” Layton said. “They’re living the same lifestyle, paying for basics, but can’t make ends meet anymore. We believe the upcoming debt reports will show continued increases in consumer stress.”

Student loans are back, and adding fuel

Another new pressure point is the return of student loan payments. Farrow shares that he’s taken recent calls from borrowers who had been ignoring their student loans under moratorium, only now to see them added back into an already strained budget.

“We’re seeing the same stress levels as mid-COVID,” he said. “But this time, the government relief isn’t coming. The cavalry isn’t coming over the hill. People are more scared.”

“Don’t let your legal question become a legal problem”

For many, calling a lawyer is intimidating—or simply too expensive. But as Farrow puts it, waiting makes everything worse.

“Talk to someone sooner,” he advised. “By the time the bank is knocking with a foreclosure notice, your options are a lot fewer. But if you call when you know there’s an issue, it’s a lot easier to give better paths and have more success.”

Affordable access to legal advice is crucial right now, he added. “Most people haven’t called a lawyer before. But with LegalShield, all that angst is taken care of. Just call. We’ve seen it before, and we can help.”

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