The Institute of Directors (IoD) has called for a reformation of UK insolvency laws, questioning whether they are "fit for purpose".
Writing on his IoD blog, general secretary Miles Templeton said it was "inevitable" that bankruptcies will approach the levels of the early 1990s, adding that lessons can be learnt from the insolvency systems of other countries.
He suggested that the chapter 11 bankruptcy regime in the US "arguably does a better job" in sustaining businesses as going concerns than the UK approach.
Mr Templeton also argued that in practice, the Enterprise Act 2002 sees a "disappointingly small" number of companies emerging from administrations as going concerns.
He said: "A rethink is needed. Reform in this area has the potential to produce a better long-term outcome for employees, creditors and the economy in general, and help foster an enterprise culture that is more supportive of companies in their hour of need."
Earlier this week, a survey suggested that a third of firms have terminated the contracts of high-risk customers.
The Ernst & Young Opportunities in Adversity report surveyed nearly 350 companies, more than half of which said they had seen a deterioration in the creditworthiness of customers.
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