Insolvency has undergone significant change over the past two decades. Processes that were once paper-based and reactive are now increasingly strategic, supported by technology and early intervention tools. Understanding these developments can help directors and business owners navigate challenges and plan for the future.

What you need to know
The concept of the three insolvency ghosts, past, present and future, provides a framework for understanding how insolvency practice has evolved. Each ghost highlights key features of its era and demonstrates the ongoing transformation of the profession.

The ghost of insolvency past (2000)
In the year 2000, insolvency procedures were largely reactive. Liquidations and administrations were the most common outcomes, while company voluntary arrangements were seldom used despite the introduction of the Insolvency Act 2000, which aimed to simplify the CVA process. Pre-packs were emerging as a topic of debate, although the Statement of Insolvency Practice 16 did not come into effect until 2009.

Key features of this period included:

• Paper-based procedures and court-centred processes
• Limited focus on business rescue, with the stigma of failure often outweighing the incentive to restructure
• Less scrutiny of directors’ duties, with the Insolvency Act 1986 providing the principal regulatory framework

During this period, insolvency practitioners were often perceived primarily as liquidators rather than advisers focused on recovery.

The ghost of insolvency present (2025)
The insolvency landscape in 2025 has changed significantly compared with just a few years ago. The pandemic accelerated reform and the Corporate Insolvency and Governance Act 2020 has broadened the toolkit available to insolvency practitioners. The restructuring plan is now widely used, enabling practitioners to intervene early and provide practical, strategic support to businesses facing financial difficulty.

Key features of 2025 include:

• A rescue first mindset, with company voluntary arrangements and restructuring plans widely used, particularly in retail and hospitality
• Digital transformation, including the use of artificial intelligence to assess risk and streamline decision-making. Platforms such as BrightPay and PeopleHR have enhanced payroll management and employee communications
• Increased cross-border complexity, reflecting the impact of Brexit and globalisation
• Greater focus on environmental, social and governance considerations, with stakeholders attentive to how businesses fail as well as whether they fail

In the current environment, insolvency practitioners not only facilitate business closure where necessary, but also support restructuring, survival and strategic repositioning.

The ghost of insolvency future (2030)
Looking ahead, insolvency is likely to become increasingly predictive rather than reactive. Technological innovation and a focus on wellbeing will shape the profession.

Possible developments include:

• Artificial intelligence-driven early warning systems identifying financial distress before it affects the balance sheet
• Real-time restructuring supported by smart contracts and blockchain-enabled governance
• Greater harmonisation of insolvency laws across jurisdictions to support digital-first businesses
• Enhanced focus on mental health and wellbeing for directors and employees during restructuring

By 2030, insolvency practitioners are expected to act as strategic advisers with technological expertise, balancing the interests of clients with those of other stakeholders.

Final thoughts
As we reflect on 2025, it is clear that insolvency is no longer solely about endings. The profession now supports transformation, resilience and, in many cases, recovery. Learning from past experience, engaging with the present and preparing for future developments is essential for directors and business owners.

How we can help
Our insolvency team advises directors, business owners and stakeholders on all aspects of corporate distress and restructuring. We can support you to:

• Review your current financial position and identify early warning indicators
• Develop and implement restructuring plans or company voluntary arrangements
• Navigate cross-border or complex insolvency scenarios
• Ensure compliance with directors’ duties and corporate governance requirements
• Manage communications with stakeholders, including creditors, employees and regulators

By combining technical expertise with strategic insight, we help clients respond effectively to challenges and seize opportunities to restructure and recover.

For further advice on navigating corporate distress or implementing a restructuring plan, please get in touch with our insolvency team at DG-InsolvencyTeam@schofieldsweeney.co.uk.