Legal Calls on Money Matters at Highest Level since March 2020 as Consumer Confidence Falls to 12-Year Low

ADA, Okla. — Oct. 13, 2026 — Consumer legal stress reached its highest level since March 2020 in September, as bankruptcy, foreclosure and consumer finance each made up a larger share of LegalShield members' calls for legal help than a year earlier, according to LegalShield's Consumer Stress Legal Index (CSLI). The index, which tracks about 150,000 monthly calls from members to LegalShield provider attorneys, has risen year over year for 27 consecutive months, a streak exceeded only by the 2006–2009 run that spanned the Great Recession.

The rise comes as consumer sentiment hits its weakest point in more than a decade. The Conference Board's Consumer Confidence Index fell to 81.9 in September, its lowest level since 2014, and for the second time since the survey began asking four years ago, more consumers described their family finances as bad than good.

"Confidence surveys tell you how people feel. Our data show what people are doing about it," said Matt Layton, senior vice president of Consumer Analytics at LegalShield. "When a growing share of our members' calls are about losing a home, filing for bankruptcy or dealing with consumer debt, the strain has moved past worry and into action."

“This feels like a rising tide, not a single shock like the banking crisis in 2008 or COVID,” said Ben Farrow, LegalShield provider attorney and partner at Anderson, Williams, & Farrow, LLC. “It’s death by a thousand cuts, and it’s driven by everyday expenses.”

Q3 2026 at a Glance

Each subindex measures a category's share of total calls to LegalShield provider attorneys. Index: January 2002 = 100. Figures are from the quarter-ending September readings unless noted.

• Consumer Stress Legal Index (composite): 75.7, up 6.3% year over year and 1.5% from June; highest since March 2020
• Foreclosure Index: 52.6, up 14.8% year over year (largest annual gain of the three) and 0.2% from June
• Bankruptcy Index: 39.5, up 4.8% year over year and down 4.4% from June after reaching 42.1 in July; Q3 average of 41.0, up 14.3% from Q3 2025
• Consumer Finance Index: 112.5, up 3.9% year over year and 4.5% from June (largest quarterly gain of the three); 6% above its July 2007 high of 106.0 leading up to the Great Recession

All three subindices have risen year over year for at least 12 consecutive months: bankruptcy, 14; foreclosure, 13; consumer finance, 12.

A Slow Build, Not a Spike

The current 27-month streak is the second longest in the index's 24-year history, behind the 34 months from November 2006 to August 2009. It has built at roughly half the pace. The CSLI has risen 22% over the current streak, compared with 40% over the first 27 months of the earlier run. Year-over-year growth peaked at 11.6% in March 2026, compared with 22.8% in December 2007, and has since eased to 6.3%. The composite stands at about 60% of its December 2008 peak of 125.2.

"Twenty-seven straight months of year-over-year rising stress is a long grind on American households," said Layton. "Growth has cooled from the spring, but the index keeps reaching new post-pandemic highs. It's been a long, gradual climb rather than a sudden spike."

The source of stress has also shifted. In the late 2000s, foreclosure drove the index while consumer finance's share of calls fell. This time, all three categories are rising.

Change over the first 27 months of each streak:

Index                                                       Current streak (July 2024 – Sept. 2026)               2006–2009 streak (first 27 months)

Consumer Stress Legal Index                                           +22%                                                                       +40%

Foreclosure Index                                                                   +45%                                                                       +211%

Bankruptcy Index                                                                   +34%                                                                       +103%

Consumer Finance Index                                                   +11%                                                                         -11%

Foreclosure: Largest Gain of the Three

The Foreclosure Index ended the quarter at 52.6, up 14.8% from September 2025 and essentially flat from June. The index eased in July and August before rising 7.8% in September. It reached 54.7 in May, its highest reading since March 2020, and has posted year-over-year gains for 13 straight months.

LegalShield's Q2 report tied the rise to the expiration of FHA borrower protections in September 2025 and to escrow costs that continue to climb as insurance and property tax bills rise. The Foreclosure Index typically leads residential foreclosure activity reported by the Mortgage Bankers Association.

National data show the same pressure:

• The national mortgage delinquency rate was 4.37% in Q2 2026, up 44 basis points from a year earlier, and the seriously delinquent rate rose for a fourth straight quarter, according to the Mortgage Bankers Association.
• FHA delinquencies reached 11.79%, up 122 basis points year over year.
• Foreclosure filings rose 13% year over year in August, and completed foreclosures rose 42%, according to ATTOM, though overall volumes remain below historical norms.

“The homeowners calling us budgeted and did the right things, but inflation is eating into their income and then their insurance doubled,” said Farrow. “They’re not buying Porsches and ribeyes. Things just cost too much, and there’s not much left in the piggy bank.”

Bankruptcy: Highest Quarterly Average Since 2019

The Bankruptcy Index reached 42.1 in July, its highest level since January 2020, before easing to 39.5 in September, up 4.8% from a year earlier. Averaged across the quarter, the index was 41.0, up 14.3% from Q3 2025 and the highest quarterly average since late 2019. Monthly growth has slowed from the spring, when the June reading was up 28.7% year over year, but quarterly averages have risen year over year for 17 consecutive quarters, the longest run on record and longer than its 13-quarter climb before and during the Great Recession.

The index has more than doubled since the Federal Reserve began raising rates in March 2022, though it remains about 20% below its 2019 average. Court data are moving in the same direction. Non-business bankruptcy filings rose 12% to 581,570 in the 12 months ending June 30, 2026, according to the Administrative Office of the U.S. Courts.

"Historically, our Bankruptcy Index has led federal court filings by about two quarters," said Layton. "The data point to filings continuing to rise into early 2027."

“Bankruptcy calls used to come mostly from older, more established people, often after an injury or job loss,” said Farrow. “Now we’re hearing from younger people who are calling sooner, while their problems are smaller and easier to fix.”

Consumer Finance: A Third-Quarter Rebound

The Consumer Finance Index, which tracks calls tied to billing disputes, collections, repossessions and creditor negotiations, rose 4.5% in the third quarter to 112.5, accounting for most of the composite's quarterly increase. The gain followed a seasonal decline in Q1 and a flat Q2. The index is up 3.9% from a year earlier and is now above its Great Recession-era high of 106.0 in July 2007.

The index reached its all-time peak during the pandemic, after jumping 12% in March 2020 as households were thrust into uncertainty.

“When the pandemic hit, consumer finance calls jumped almost overnight,” said Layton. “This time there is no single shock. Consumer finance is above anything we recorded during the Great Recession, and it moved higher again this quarter.”

“I recently saw an ad for a credit card charging more than 30% interest,” said Farrow. “Once you miss a payment, it snowballs. You’re only paying off interest, the balance keeps growing, and eventually you can’t keep up.”

Household debt remains near record levels. Total household debt stood at $18.77 trillion in Q2 2026, up $383 billion from a year earlier, according to the Federal Reserve Bank of New York. The annualized share of credit card balances moving into serious delinquency was 6.97%, about where it stood a year earlier.

About the Consumer Stress Legal Index

The CSLI is a suite of leading indicators of the economic and financial status of U.S. households. It is part of LegalShield Intelligence, a dataset of more than 36 million requests for legal assistance dating to 2002, with about 150,000 calls received monthly from LegalShield members seeking legal help. Each call is logged as an intake in one of roughly 90 areas of law. Each subindex reflects the number of intakes in an area of law as a share of total intakes in a given month. The CSLI comprises three subindices: bankruptcy, foreclosure and consumer finance. Unlike sentiment surveys, the CSLI captures the concrete steps people take to seek legal help. The index is tracked monthly and reported quarterly.

About LegalShield

For more than 50 years, LegalShield has provided everyday Americans with easy and affordable access to legal advice, counsel, protection, and representation. Serving millions, LegalShield is one of the world's largest platforms for legal, identity, and reputation management services protecting individuals and businesses across North America. Founded in 1972, LegalShield and its privacy management product IDShield equip individuals, families, businesses, and employers with the tools they need to affordably live a just and secure life. Through technology and innovation, LegalShield is transforming how people access legal guidance, with hundreds of qualified attorneys and law firms across the country. To learn more, visit LegalShield.com and IDShield.com.

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