Americans aren’t seeking legal help for finances. What it means for the 2024 election.

Many Americans like to grumble about the economy and financial matters, whether it’s over high housing costs, the rising prices of groceries, lofty credit-card interest rates or something else. But when it comes to seeking help from an attorney to deal with these and other issues, it’s a different story.

The volume of requests for assistance over financial issues remains well below long-term averages, according to a report from LegalShield, which sells legal plans, connects consumers with attorneys and tracks the types of problems they’re facing.

In other words, there’s a disconnect here: While many consumers gripe about their financial situation, most don’t view it seriously enough to take legal actions to address such concerns. That’s a favorable sign for the economy. It also might have repercussions for this fall’s presidential election.

TOPSHOT - (COMBO) This combination of pictures created on September 29, 2020 shows US President Donald Trump (L) and Democratic Presidential candidate former Vice President Joe Biden squaring off during the first presidential debate at the Case Western Reserve University and Cleveland Clinic in Cleveland, Ohio on September 29, 2020. (Photo by JIM WATSON and SAUL LOEB / AFP) (Photo by JIM WATSONSAUL LOEB/AFP via Getty Images)

According to the LegalShield analysis, if consumer legal stress in battleground states remains muted, that could point to favorable results for incumbents including President Biden.

Those findings “have nothing to do with feelings or consumer sentiment,” said Matt Layton, senior vice president of consumer analytics for LegalShield. Rather, the numbers measure the volume of people “who are actually calling in for help.”

LegalShield has been providing legal-assistance plans for decades. More recently, it started to track patterns in the data to get a real-time sense of how Americans are responding to various financial issues, including those tied to housing and possible bankruptcy filings. Starting with the March numbers, LegalShield has been trying to determine how and if consumer requests for help might translate into voting patterns.

Clues to the November presidential election

When consumer stress in swing or battleground states is less pronounced than overall national stress heading into October or November, that favors the incumbent party in the White House, according to LegalShield. When battleground-state stress is elevated heading into national elections, it points to a victory for the out-of-power candidate and political party.

Currently, the mood using this indicator reflects lower financial stress in battleground states and thus a possible victory for President Biden over Donald Trump. LegalShield categorizes the following seven states as battlegrounds based on tight presidential results in 2020: Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin. The list can change over time, Layton said.

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The company’s database includes more than 35 million consumer requests for legal assistance dating to 2002. Lately, the company has been fielding about 150,000 calls each month.

LegalShield tracks consumer requests for legal help and compiles this information into an overall Consumer Stress Legal Index, comprised of three broad categories: bankruptcies, housing and various other financial issues such as billing disputes and repossessions.

Consumer stress under control, for now

None of these areas is flashing especially high-stress readings at the moment, though some numbers have been rising gradually toward pre-Covid levels, Layton said. One problem area he cited was that faced by young adults trying to meet their obligations under Buy Now, Pay Later programs, which feature installment loans and tend to appeal to less-affluent consumers.

LegalShield’s overall legal stress index has been improving, hitting a 12-month low for consumer legal requests in March. The consumer-finance portion of that has been especially favorable and is still below its level of January 2020, just before the COVID-19 pandemic hit.

The foreclosure index remains below its two-year average, while the bankruptcy index has climbed over the past year from low levels. LegalShield said its bankruptcy-stress numbers precede actual filings as reported by the U.S. court system by around two quarters. This isn’t surprising, considering that many consumers will seek legal help and take other measures in hopes that they won’t need to file for bankruptcy.

Bankruptcy filings as reported by the American Bankruptcy Institute and Epiq Systems have been nudging higher for the past 20 months under the weight of higher interest rates, increased housing costs and a drawdown of savings, yet they remain well below levels of several years ago.

LegalShield said its foreclosure index closely matches foreclosure numbers reported quarterly by the Mortgage Bankers Association, while its overall consumer stress index often precedes by two or three months consumer-sentiment readings reported by the Conference Board. That group’s assessment of consumer sentiment, derived from surveys, has been relatively unchanged over the past couple of years, though it slid in April.

Albertsons employee Melissa Spellins, right, scans a customers groceries at the cashier at an Albertsons location at the Desert Ridge Marketplace in Phoenix on March 7, 2023.

Another consumer-sentiment gauge, from the University of Michigan, has been climbing, revealing more optimism, but still remains a bit lower than where it was prior to the pandemic.

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