A spike in consumer bankruptcies is also on the horizon as companies shrink their workforces, bankruptcy professionals said. In addition to regulatory changes, tariffs, existing debt burdens, and interest rates, artificial intelligence is adding to the pressure on businesses.

Some employers—including restaurants, retail, and health-care companies—are also affected by voluntary and involuntary deportations, making hiring more difficult, said Daniel Gielchinsky, the co-founder of DGIM Law, who has represented creditors in bankruptcy.

Health-care bankruptcies are climbing because of rising costs in insurance reimbursements, leasing, and employee benefits and pay, Gielchinsky said. The Trump budget bill’s cuts to health-care spending won’t help the sector, attorneys noted.