LegalShield Data: Rising Consumer Stress Casts Debt Cloud Over Holidays

• As holiday spending rises, so does LegalShield’s latest Consumer Legal Stress Index
• Composite Consumer Legal Stress up 9^th consecutive month; Bankruptcy, foreclosure and consumer debt subindices also continue upward trend in November
• Source: LegalShield tracks more than 150,000 monthly calls from members seeking help across the nation – real actions people take when facing financial and legal pressure

ADA, Okla.--(BUSINESS WIRE)--Americans kicked off the holiday season with record spending — and record requests for legal help with their debts.

LegalShield's Consumer Legal Stress Index (CLSI) climbed to 72.5 in November, its ninth consecutive monthly increase (up 9.4% YoY), driven by a sharp spike in calls about billing disputes, debt collection and loan modifications. The Consumer Finance subindex jumped 4.6% in just two months to 113.3, signaling that financial strain has shifted from a looming threat to an immediate crisis for millions of households.

"The story all year has been warning signs, foreclosures in spring, bankruptcies in summer," said Matt Layton, LegalShield senior vice president of Consumer Analytics. "Now we're seeing people pick up the phone about consumer debts. That's a different kind of call."

Consumers Override Their Own Caution

The surge in legal stress comes as consumers appear to be overriding their own financial caution. A November Gallup poll found Americans slashed their projected holiday gift spending by a record $229, the steepest midseason decline in the survey's history, exceeding the 2008 financial crisis. Yet Adobe Analytics reported Cyber Week spending hit $44.2 billion, up 7.7% year over year, with Buy Now, Pay Later (BNPL) usage reaching an all-time high of $1.03 billion on Cyber Monday alone.

The question is whether the final weeks of the season bring more of the same, or whether rising legal stress signals a pullback still to come.

"Gallup measures what people say they'll do. Adobe measures what they spend. We measure what happens next — when they call a lawyer," Layton said. "Right now, all three are flashing warning signs, but only one captures the legal dimensions."

Holiday Spending Meets Late Summer Warning Signs

The spike in Consumer Finance inquiries validates concerns LegalShield identified earlier this year. An August LegalShield survey of more than 2,000 Americans found 76% use BNPL services, with half having missed payments and 45% facing billing disputes or other legal issues.

According to that survey, two-thirds of BNPL users juggle multiple loans, often for essentials like groceries (47%) and medical bills (35%), creating exactly the kind of debt stress now showing up in calls to LegalShield's network of provider law firms.

Adding pressure, FICO is expected to factor BNPL payment history into credit scores, a change 38% of users remain unaware of. For the 49% who have missed BNPL payments, the credit impact could compound their financial strain heading into 2026.

Stress Across All Three Subindices

The CSLI is a composite index built from three subindices tracking calls related to Bankruptcy, Foreclosure and Consumer Finance. All three remain elevated:

• Consumer Finance: 113.3, up 4.6% since September and 6.9% year over year. This subindex tracks inquiries about billing disputes, loan modifications and debt collection.
• Bankruptcy: Up 5.2% year over year, continuing its climb since the Federal Reserve's initial rate hike in March 2022. LegalShield's bankruptcy data historically leads actual filings by two quarters.
• Foreclosure: Up 20.9% year over year, the sharpest increase among the three subindices, as elevated mortgage rates and affordability constraints continue to stress homeowners.

"Foreclosures surged first, then bankruptcies spiked, and now Consumer Finance is shooting up as people load on holiday debt," Layton added. "Cyber Week is in the books, but holiday shopping isn't. We'll be watching whether this Consumer Finance surge is a leading indicator of a spending pullback, or evidence that people are pushing through despite the stress. Either way, our data suggests 2026 will start with a heavy financial hangover."

About the Research: LegalShield Consumer Stress Legal Index

LegalShield tracks more than 150,000 monthly calls to provider law firms across the country -- real actions people take when facing financial and legal challenges, not surveys measuring sentiment. The CSLI is derived from more than 36 million records dating to 2002.

As part of LegalShield's mission to ensure every person has equal access to justice, the company mines its data for insights policymakers and business leaders can use to make informed decisions. Released quarterly with periodic updates, view past reports on the CSLI page on LegalShield.com.

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, has provided individuals, families, businesses, and employers with tools and services needed to affordably live a just and secure life. Through technology and innovation, LegalShield is disrupting the traditional legal system and transforming how and where people receive legal guidance and services, with access to hundreds of qualified, trusted attorneys and law firms. LegalShield and IDShield are products of Pre-Paid Legal Services, Inc. To learn more about LegalShield and IDShield, visit LegalShield.com and IDShield.com.