An uptick in bankruptcy assistance among Generation X and Millennials signals a burgeoning debt crisis, overshadowing recent economic optimism, legal experts told Newsweek.

In contrast to recently issued positive economic data showing a 29 percent surge in consumer confidence since November, LegalShield’s December Consumer Stress Legal Index (CSLI) documents a relentless rise in financial duress, reaching a three-year peak as consumers seek legal help for bankruptcy and other legal assistance.

The data, drawn from over 35 million legal service requests, is forecasting a dip in that consumer confidence, and exposes a groundswell of fiscal challenges.


The trend, disproportionately impacting younger generations, points to a latent economic strain that macroeconomic figures may not fully capture, which hints at a potential credit reckoning on the horizon.

It’s reflected in broader economic data. U.S. household debt has seen an increase, rising 1.3 percent in the third quarter of last year to a record $17.29 trillion.

The uptick was propelled by increases across mortgage, auto loan, credit card, and student loan balances, according to the Federal Reserve Bank of New York. At least some of those people are now dealing with bankruptcy, and are reaching out to LegalShield for advice.

According to LegalShield’s data, there’s been a notable 24.7 percent increase in Gen X and a 40.1 percent surge among Millennials reaching out for bankruptcy assistance year over year.

That surge causes friction with broader economic indicators, according to LegalShield’s SVP of Consumer Analytics Matt Layton, suggesting that the generations, aged between 44-59 and 27-42, respectively, may be the canary in the coal mine for looming credit challenges.

“People don’t call attorneys unless they are genuinely worried about something,” Layton said in a statement shared with Newsweek via email. “This is not a survey with leading questions or prompts about the economy; these are real concerns from real people who sought out affordable legal advice to take action.”

Their December CSLI report surged to 66.7, the highest since November 2020, suggesting a disquieting trend sitting at odds with otherwise optimistic economic reports.

The peak in December completes a sustained 10-month climb, according to Layton, and comes with significant implications for consumer behavior.