Inflation's Pain: Financial Stress At Levels Not Seen Since The Pandemic

When everything costs more, people struggle.

Struggling people feel stress.

And Americans are feeling that kind of stress at a level not seen since March 2020.

What was going on in March 2020?

Governments around the world shut down the economy.

LegalShield’s Consumer Stress Legal Index (CSLI) surged 6.3 percent year-over-year to 75.7.

LegalShield calculates its index based on around 150,000 monthly calls from members to its provider attorneys. The stress index has risen year over year for 27 consecutive months. The only longer streak occurred in 2006–2009, a run that spanned the Great Recession.

A LegalShield spokesperson noted that the current CSLI dovetails with consumer sentiment polling showing Americans are increasingly worried about the economy. The Conference Board's Consumer Confidence Index fell to 81.9 in September, the lowest level since 2014.

"Confidence surveys tell you how people feel. Our data show what people are doing about it. 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."

Three subindices make up the CSLI.

The Foreclosure Index stood at 52.6, up 14.8 percent year-on-year. According to LegalShield's Q2 report, the expiration of FHA borrower protections in September 2025, coupled with rising escrow costs as insurance and property tax bills rise, drove the spike in foreclosure calls.

Meanwhile, the national mortgage delinquency rate was 4.37 percent in Q2 2026, according to the Mortgage Bankers Association. That was up 44 basis points from a year earlier. The seriously delinquent rate rose for a fourth straight quarter.

The Bankruptcy Index climbed 4.8 percent over the last year to 39.5. According to LegalShield, this index is a leading indicator of future bankruptcy filings.

LegalShield said bankruptcy calls averaged have risen year over year for 17 consecutive quarters, the longest run on record, including the 13-quarter climb before and during the Great Recession.

The Consumer Finance Index climbed to 112.5, a 3.9 percent annual increase. It tracks calls related to billing disputes, collections, repossessions, and creditor negotiations.

Credit card debt is at record levels as Americans try to cope with rapidly rising prices and dwindling savings.

Meanwhile, the Fed keeps nudging rates higher, trying to tame sticky price inflation. This pushes credit card interest rates up, adding stress to an already overburdened consumer.

A LegalShield spokesperson said this index reached its all-time high during the pandemic, jumping almost overnight as the economy shut down. However, the current 27-month streak of increasing consumer stress wasn’t sparked by a single event. It’s been a slow build. A spokesperson called it “a long grind on American households.”

“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.”

LegalShield provider attorney Ben Farrow agreed.

“This feels like a rising tide, not a single shock like the banking crisis in 2008 or COVID. It’s death by a thousand cuts, and it’s driven by everyday expenses.”