LegalShield likely wasn’t surprised when bankruptcy filings increased year-over-year for the 19th consecutive month in February.

That’s because the platform provider for legal, identity, and reputation management services said its January Consumer Stress Legal Index (CSLI) showed a nearly four-year high in bankruptcy inquiries.

John Saltarelli, a LegalShield provider attorney in Texas, cited three prevailing pressures driving the uptick in inquiries about bankruptcies, vehicle repossessions and billing disputes. Saltarelli pointed to credit card defaults, aggressive collections and inflation.

“Consumers we talk to only have enough money to cover some of their bills, so they prioritize a roof over their head ahead over other expenses, racking up high interest credit cards,” Saltarelli said in a news release from LegalShield. “Collectors are turning up the heat after the pandemic, and increasing inflation makes what money people do have, worth less.”

U.S. household debt hit a record $17.5 trillion in the fourth quarter of 2023, as reported by the Federal Reserve Bank of New York in early February.

Delinquency rates credit card debt and auto finance hit their highest levels since the Great Recession, according to that Fed tracking.

Despite an overall drop in consumer finance inquiries, LegalShield reported calls about car repossessions and billing disputes continued to rise, especially for Gen X and millennials.

Calls to LegalShield provider attorneys regarding repossessions are at their highest level since April 2021, with Gen Xers and millennials calling at more than twice the rate of January last year.

Questions about billing disputes are up 53% year over year for all LegalShield members, but up 96% for Gen X and Millennials.

“People are asking us to help assess options such as payment plans, or even file for bankruptcy,” Saltarelli said. “Most of these folks want to pay their bills and meet their obligations, but they’re reaching a breaking point. While difficult, they get relief knowing an attorney who has seen this before is helping them navigate a new plan.”

LegalShield also said rising calls for help with bankruptcies signal a rise in personal bankruptcies through the second quarter.

“Our data bucks prevailing wisdom: While we saw the expected seasonal easing of consumer stress felt by our members, we just posted a post-pandemic record for bankruptcy inquiries,” LegalShield CEO Warren Schlichting said in the news release.

“Despite the headlines, our data implies we’re not out of the woods yet, and we believe policymakers should remain attentive to the economy of everyday Americans,” Schlichting continued.

LegalShield’s CSLI was launched in 2018 and is based on a dataset of more than 35 million consumer requests for legal assistance since 2002. The index is built on three sub-indices tracking calls for legal assistance for issues related to consumer finance, bankruptcy and foreclosure.

LegalShield receives approximately 150,000 contacts each month from consumers seeking legal help in more than 90 areas of law, including key consumer issues.

LegalShield predicted bankruptcy filings on the rise for at least six more months.

“The calls to LegalShield provider attorneys for bankruptcy advice continue to increase, sustaining a trend we’ve seen since late 2022,” said Matt Layton, LegalShield’s senior vice president of consumer analytics.

“Despite several positive macroeconomic signs, people are feeling pinched to the point of calling a lawyer in seek of relief,” Layton continued. As we’ve seen a reaction to the January inflation numbers, clearly more people are falling short of their financial obligations and the data indicate the trend will grow through the first half of this year.”