Perspectives 2025: Emerging trends in the insolvency sector for 2025

Economic pressures and sector trends

While some industries have stabilised, insolvency practitioners continue to see distress across key sectors. Milan highlights particular difficulties in industries where rising costs have put businesses under immense strain.

“Sectors like agriculture, energy, and retail have been hit particularly hard,” he explains. “The cost of goods, wages, and operations has climbed to levels many businesses simply can't sustain.  Even companies that were profitable a few years ago are now struggling to balance their books.”

Meanwhile, manufacturing and industrial operations are feeling the pressure of global supply chain disruptions and increased energy costs. “We've seen businesses that were once thriving being forced to reconsider their future due to unpredictable costs and delays in receiving essential materials,” Milan says. 

The growing complexity of business failures 

Beyond traditional economic pressures, insolvency cases are becoming more complex, with multiple factors contributing to financial distress. Milan points out that businesses today are structured in increasingly intricate ways, making insolvency proceedings more challenging. 

“Many companies operate across multiple jurisdictions, have complicated financial arrangements, or are tied into long-term agreements that make restructuring difficult.  This means that when they hit financial trouble, it's not a straightforward case of closing the business or selling assets – there are layers of complexity to unravel.” 

This complexity is especially evident in sectors that rely on global trade and logistics.  “The global supply chain is still adjusting to post-pandemic disruptions, and businesses that rely on cross-border transactions are facing delays, unexpected costs, and regulatory hurdles that make their financial planning much harder,” Milan notes. 

Digital assets and the future of insolvency cases

A significant trend shaping the insolvency sector in 2025 is the rise of digital assets.  While still a relatively small part of overall insolvency cases, businesses with cryptocurrency holdings or blockchain-based assets are presenting new challenges for practitioners. 

“The biggest issue with digital assets is proving ownership and securing them,” Milan explains. “Unlike traditional bank accounts or physical assets, cryptocurrencies are decentralised and difficult to track. Tracing those funds can be incredibly complex if a business has invested in crypto but hasn't kept proper records.”

This is particularly problematic in insolvency cases where digital assets are held in personal wallets rather than corporate accounts.

“Whoever controls the private key essentially owns the asset. If a director transfers crypto to a private wallet before an insolvency process begins, recovering those funds becomes a legal and technical challenge.”

Milan commented that regulatory frameworks for handling digital assets in insolvency proceedings are still evolving. “Insolvency practitioners have clear legal powers to recover a company’s assets, including crypto.  While handling digital assets can require additional effort and investigation, it’s an evolving aspect of insolvency that will continue to develop in the coming years.”

The increasing cost of running a professional services business

Insolvency firms themselves are facing rising costs and regulatory burdens. The need for enhanced compliance, cyber security, and operational efficiency is making it more expensive to run a professional services business.

“People often assume that insolvency is a straightforward process, but the level of compliance required has never been higher,” Milan explains. “We have to meet strict regulatory requirements, invest in cyber security, and maintain certifications just to operate. The cost of simply staying compliant has increased dramatically.”

A growing focus on cost efficiency among clients presents a challenge, but it also highlights the value of insolvency professionals. “There’s a common perception that our role is simply to wind companies down, but in reality, we provide essential services that require specialist expertise,” he says.  “While clients are keen to manage expenses carefully, this also gives us an opportunity to demonstrate the real impact and value of our work.”

Looking ahead - what is next for the insolvency sector?

As businesses navigate another challenging year, insolvency professionals will play a critical role in helping companies restructure, recover, or responsibly wind down. Milan expects continued turbulence in specific industries and warns that insolvency numbers will likely remain steady.

“We’re not seeing a slowdown in insolvencies, and there’s little indication that things will improve dramatically in the short term,” he says. “For businesses already struggling, the pressures are only increasing, and for those just about holding on, any further disruption could tip them over the edge.”

Key trends to watch in the insolvency sector this year include:

• Ongoing distress in energy, retail, and property development due to high operational costs
• More complex insolvency cases involving multi-jurisdictional businesses and intricate financial structures
• Increased scrutiny on regulatory compliance and financial misconduct, leading to more investigations
• The growing role of digital assets in insolvency proceedings requires new expertise and regulatory adaptation
• Rising costs for insolvency firms as compliance, cyber security, and operational requirements become more demanding.

Despite these challenges, Milan remains optimistic about the profession's resilience. “Insolvency is an ever-evolving field. As businesses change, we have to adapt with them. The challenges we face today are different from those a decade ago, but at the core, our role remains the same – helping businesses find the best possible outcome in difficult situations,” he concludes.