Crisis Code and over-indebtedness of businesses and citizens: the second chance must not become a tailor-made amnesty
More and more Italian businesses are falling into crisis. In 2025, crisis resolution procedures reached 13,470, up from 11,660 in 2024 and 9,583 in 2023, an increase of 15.5% in a single year (Unioncamere data). Judicial liquidations, formerly known as bankruptcies, numbered 9,869, 7.2% more than in 2024. In the second quarter of 2025 alone, 2,712 businesses had to begin one, 18% more than in the same period of 2024 and 33% more than in 2023. The hardest-hit sector is retail and wholesale trade, with 826 cases in the second quarter compared with 713 in the first, followed by construction and services. Lombardy is the region with the highest number of cases, ahead of Lazio and Emilia-Romagna. Around 20% of new businesses close within their first two years of activity, and 65% within ten.
Alternative instruments to liquidation are also on the rise. Applications for negotiated crisis settlement rose from around 600 in 2023 to 1,048 in 2024 and 1,776 in 2025 (+69.5%), yet only 20% end in a successful turnaround. In 2025 there were 895 preventive arrangements with creditors (+17.5%). Simplified arrangements rose to 143, from 85 in 2024, while debt restructuring agreements recorded 348 openings.
Households are faring no better. 57.4% of Italians struggle to make ends meet (Eurispes, Rapporto Italia 2024). According to Bank of Italy estimates, more than 7 million people are over-indebted, yet only 7,748 new cases were opened in 2023 (Ministry of Justice). Italian households rank third in Europe for net wealth and are among the least indebted on the continent, but they have little liquidity and are therefore vulnerable to unexpected events.
With Law No. 3 of 2012, known as the ‘salva-suicidi’ (suicide-prevention) law and now incorporated into the Business Crisis and Insolvency Code, the State helps those who find themselves in difficulty through no fault of their own. It is an instrument of legal civilisation, but one that must be applied rigorously. Applications are increasingly being submitted by taxpayers with above-average incomes and a high standard of living. For years they fail to pay their taxes, staying below the threshold of criminal liability, and then request the cancellation of tax debts amounting to hundreds of thousands of euros. In return, they sometimes offer 1% of what they owe, or even less. When the creditor is the State, the bill falls on the community as a whole.
For this reason, it must always be verified whether the debtor is deserving, that is, whether they fell into crisis without wilful misconduct or gross negligence. Several courts are moving in this direction. In its judgment of 23 July 2025, the Genoa Court of Appeal upheld the Italian Revenue Agency’s appeal against a minor arrangement with creditors that had been approved despite the tax authorities’ vote against it. The case concerned a businesswoman who for years had paid suppliers, banks and employees, neglecting only the Treasury.
In this respect, the most sensitive issue is the cram down, that is, the forced approval through which the court confirms the agreement even against the vote of the tax administration. The legislature has already narrowed this possibility: under the ‘Correttivo-ter’ (Legislative Decree 136/2024), the tax authorities must receive at least 50% of the amount owed, excluding penalties and interest. The threshold rises to 60% if the other creditors party to the agreement represent less than 25% of the claims, or if there are none at all. The cram down is also excluded where the debt owed to public creditors is equal to or greater than 80% of the total and arises mainly from failure to pay over five tax periods. In judgment No. 4365 of 26 February 2026, the Court of Cassation declared inadmissible an appeal brought by a company. The company was offering 2.9% of a tax debt of over €7.2 million and had built the agreement around just two private suppliers, paid around €400 in total. For the judges, this was not a debt restructuring but a ‘forced tax settlement’. The Court of Justice of the European Union, in its judgment of 10 April 2025, reaffirmed that the debtor’s good faith remains the foundation of debt discharge.
There is also a contradiction with criminal law. According to the Court of Cassation, those who fail to pay VAT or withholding taxes cannot justify themselves simply by citing a lack of liquidity. They must prove that the crisis is not attributable to them and that they could not have dealt with it in any other way. For the Court, paying employees or banks instead of the tax authorities is proof of a deliberate choice (judgment No. 40144 of 15 December 2025). Yet the same taxpayer can apply for the cancellation of the debt through the instruments of the Crisis Code without having to prove that they are not at fault. Furthermore, for failure to pay withholding taxes, court approval of the arrangement can contribute to a ground for exemption from punishment, even when it is imposed on the tax authorities through a cram down, provided that it is followed by full payment of the amount established before the opening of the trial (Court of Cassation, criminal section, judgment No. 1043 of 10 January 2025). An overly lenient assessment of the causes of the crisis thus risks wiping the slate clean on tax claims, including final ones, and even on criminal proceedings. This is why a closer link is needed, including through legislation, between tax, criminal and insolvency law.
The Eurispes Laboratory on Fiscal and Tax Policy puts forward a number of proposals:
- make the debtor’s worthiness an admissibility requirement for all procedures under the Crisis Code, to be verified first, including by the court on its own motion;
- allow forced approval only where the Treasury remains silent or its refusal is manifestly unjustified, with tacit consent after 60 or 90 days from the proposal;
- establish a public body for debt certification and assessment, and joint public-private committees for the pre-screening of applications;
- verify household budgets using criteria set by law and create a national online platform on which citizens could consult their debts free of charge, check their repayment capacity and obtain a personal creditworthiness rating;
- create a National Fund for the Prevention of Over-indebtedness, financed by public and private entities: banks, finance companies, the gambling sector and a share of the proceeds from the recovery of tax evasion;
- introduce State guarantees on financing for businesses undergoing restructuring, a ‘shield’ for auditors and supervisory bodies that report the crisis within 60 days, and a mechanism to make case law consistent, through a preliminary referral to the Court of Cassation.
The second European directive on insolvency, adopted on 30 March 2026, will require the Crisis Code to be revised on several points: ‘pre-pack’ sales, asset tracing, avoidance actions and directors’ liability. The way forward is to offer a genuine second chance to those in difficulty through no fault of their own, and to prevent the application of the Code from turning into a tailor-made amnesty for those who chose not to pay.
