Consumer finances remain strong, but they are being undermined by high inflation, high interest rates, and exhausted excess saving for some. Hence, bankruptcy filings are showing a deterioration in household finances. A first-quarter increase in filings is seasonally normal as holiday spending takes its toll, and that pattern continued. U.S. courts reported that nonbusiness filings came in 12.9% above their year-ago level after rising 19% the prior quarter. On a quarter-to-quarter basis, filings rose 6.9%. Business filings rose in the quarter, up 1.4% from the fourth quarter. They were up 34.6% from a year earlier as high interest rates took a toll. This compares with a 53.2% increase on a year-ago basis in the prior quarter.
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