# Managing Record Household Debt: Lessons from the LegalShield Stress Index

- Link: https://tolenfoundation.org/household-debt/
- Published: 2022-02-22T09:15:43+00:00
- Author: tolenadmin

## The “New Normal” of Financial Stress

In the fourth quarter of 2025, the CSLI rose for the third consecutive quarter, 
hitting its highest sustained level since the early pandemic. But unlike sentiment
surveys that ask people how they feel, our index tracks what people do.

The data shows a 10.4% year-over-year increase in Americans’ taking the concrete
step of seeking legal help to manage financial pressure.

## 3 Warning Signs We’re Watching

Our data highlights three specific areas where the “spending mask” is beginning 
to slip:

 1. The Credit Crutch: The Consumer Finance subindex climbed 18.1% since Q1. People
    aren’t just buying luxuries; they are seeking legal advice for billing disputes
    and creditor negotiations as they use debt to cover essentials like groceries and
    utilities.
 2. The Bankruptcy Bellwether: Historically, when LegalShield [bankruptcy inquiries](https://www.legalshield.com/blog/how-much-does-bankruptcy-chapter-7-cost)
    go up, federal court filings follow about two quarters later. With inquiries up
    15.6% year-over-year, our data suggests a wave of filings is on the horizon for
    2026.
 3. The Hidden Housing Struggle: While completed foreclosures remain muted, legal inquiries
    rose 15%. Homeowners are currently “buying time” with modifications to deal with
    insurance and tax costs, but the underlying affordability crisis remains.

## Why This Matters to You

 

#### “Rising consumer stress seems to be the new normal,”

says Matt Layton, LegalShield Senior VP of Consumer Analytics.

When financial stress turns into a collection call, a credit dispute, or a housing
issue, the options get narrower and the stakes get higher. The line between “we’re
managing” and “we need help” grows thinner.