After several years of economic turbulence, a renewed rise in global insolvencies is expected in 2026. According to Allianz Trade’s Global Insolvency Outlook 2026–27, worldwide insolvencies grew in 2024–25 and are projected to rise further in 2026, with the United States showing a sharp increase in large corporate bankruptcies.
What’s Driving the New Insolvency Wave?
This upward trend reflects several converging pressures. Persistently high interest rates continue to make refinancing more difficult for leveraged companies. Consumer demand has softened in several sectors, reducing revenue and tightening margins. Many U.S. corporates continue to carry high debt loads from the 2020–2023 period, compounding the challenge. Distressed real estate markets have also contributed to the increasing number of filings, particularly among mid-market borrowers.
While the goal of many bankruptcy cases is to lead a company out of insolvency by restructuring large portions of the organization and its debts, this has become increasingly more difficult. Interest rates have been and remain high, meaning restructuring and refinancing companies in today’s economy is not often a viable option.
Who is Most at Risk?
According to Investopedia’s Capital Intensive Industries Explained: Definition, Examples, and Impact, debt-heavy and capital-intensive businesses are among those most at risk of insolvency. Industries like transportation, energy, automobile manufacturing, and other sectors that require large up-front investment are having trouble finding creditors and investors. Lenders and creditors following 2023 have been increasingly risk-averse, and rightfully so. It is critical for business owners and creditors to be prepared and well informed of their options.
In addition to debt-heavy industries, consumer-facing industries are bearing the brunt of insolvency. Especially with increasing tariffs, consumers are struggling to keep up with rising prices as companies try to preserve profit margins that are beginning to wear thin.
The health industry has also seen a sharp increase in bankruptcy filings in the past couple of years. The largest firms in healthcare have been seeing the most trouble and are expected to continue filing for bankruptcy at an elevated rate. Notably among the contributing factors are the present labor shortages in the healthcare industry following 2020, as well as unenrollment in Medicaid as providers have delays and difficulties collecting payments. The trend in healthcare bankruptcy filings is beginning to wind down, but the effects have already been massive.
Impacts on Creditors & Cross-Border Claims
For creditors, the implications are significant. As large Chapter 11 filings rise, litigation over pre-petition transactions is becoming more frequent, and contested DIP financing is becoming more complex. Cross-border claim structures are appearing more often as global groups default simultaneously in multiple jurisdictions, and the risk of fraudulent transfer and preference actions continues to escalate.
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Looking Ahead
As bankruptcies across the globe rise it is imperative for creditors and investors to be proactive. The year ahead is likely to bring heightened restructuring activity, and early engagement remains essential to protecting recovery rights.
Thomas H. Curran Associates represents creditors and investors in complex bankruptcy and restructuring litigation across the U.S. and internationally.
For more information, please contact us at +1 (617) 207-8670 or visit https://thcalaw.com/contact/