How to Practice Insolvency Law in India?

"A practical guide for lawyers who want to do more than just read the code."

There's a moment every young lawyer remembers. You're sitting across from a senior, a file lands on the desk, and the partner says, "We have a Section 7 application to file by Thursday."

And in that moment, all the theory you studied in the IBC, its sections, and its schedules feels suddenly very far away from what is actually being asked of you.

That gap between knowing the law and practicing it is real. And nowhere is it wider than in insolvency.

Why Insolvency Law Is the Opportunity You Shouldn't Miss

Before the Insolvency and Bankruptcy Code, 2016, came into force, India's insolvency framework was fragmented and notoriously slow. Cases dragged for decades under the SICA and BIFR. Recovery rates for creditors were abysmally low. The IBC changed all of that. It introduced a time-bound resolution process, shifted control from promoters to creditors, and created an entirely new legal ecosystem overnight.

Since its enactment, over ₹3.5 lakh crore has been realized through IBC resolutions. The NCLT hears thousands of matters each year. Law firms have built dedicated insolvency teams, banks have entire legal departments focused on IBC strategy, and the Supreme Court has produced some of the most consequential corporate law judgments in India's history—all arising from this one statute.

The demand for competent insolvency lawyers consistently outpaces supply. If you're thinking about building a practice here, the opportunity is as real as it gets.

Understanding the Basics: How the IBC Works

The Corporate Insolvency Resolution Process (CIRP) is the backbone of the Code for corporate debtors. It is triggered when a company defaults on a debt of ₹1 crore or more. Three categories of applicants can initiate CIRP:

•  Financial creditors—banks, NBFCs, bondholders under Section 7

• Operational creditors—vendors, employees, service providers under Section 9

• The corporate debtor itself under Section 10

Once the NCLT admits an application, an Interim Resolution Professional (IRP) is appointed, a moratorium under Section 14 kicks in (freezing all legal proceedings and asset transfers), and control of the company moves from promoters to the Resolution Professional. A Committee of Creditors (CoC) is constituted from the financial creditors, and the search for a resolution applicant, i.e., someone willing to take over the company, begins.

The entire CIRP must ideally conclude within 180 days, extendable to 330 days. If no viable resolution plan emerges, the company enters liquidation, where assets are distributed following the priority waterfall under Section 53: secured creditors first, unsecured creditors next, and equity shareholders last.

Understanding this structure is your starting point. Everything else in practice flows from it.

The Forums You Will Work In

Insolvency practice does not happen in one room. You need to be fluent across multiple forums:

NCLT is the primary adjudicating authority where applications are filed, disputes during CIRP are heard, and resolution plans are approved. NCLAT hears appeals from NCLT orders, and those decisions can be challenged before the Supreme Court of India.

Critically, the IBC doesn't exist in isolation. A creditor facing a default also has access to SARFAESI enforcement, Debt Recovery Tribunals (DRTs), and arbitration. Knowing when to use which forum and why is one of the sharpest skills an insolvency lawyer can develop. Sometimes the IBC is the sword. Sometimes it's the threat of the IBC that gets the deal done without filing at all.

What the Work Actually Looks Like

Let's be honest about something: insolvency practice is not always landmark Supreme Court arguments. A lot of it is detailed, careful, unglamorous work, and that's where the real craft lives.

It could mean drafting a demand notice under Section 8 for an operational creditor late at night. It could mean reviewing hundreds of creditor claims and deciding which ones are valid and in what amount. It could mean sitting through long CoC meetings where the voting dynamics are as much political as they are legal, where secured creditors with the largest exposure run the table, and every other stakeholder is trying to protect their slice.

It could also mean advising a promoter on whether to challenge admission - arguing pre-existing disputes, limitation, or the absence of a debt and default. Or helping a resolution applicant structure a plan that meets the requirements of Section 30 while remaining commercially viable.

And then yes, sometimes it is the Essar Steels and the Bhushan Powers. The cases that reshape the law itself.

Five Things You Need to Build This Practice

1. Understand the ecosystem, not just the sections. Start with the actors- who is the Resolution Professional and what do they do day-to-day? How does the CoC function in practice? What does the IBBI regulate? Once you understand the incentives and roles of each player, the Code becomes far more legible.

2. Learn forum strategy. Choosing between the IBC, SARFAESI, DRT, or arbitration is not a mechanical exercise. Each path has different timelines, leverage points, and risks. Great insolvency lawyers help clients choose the right tool, not just the one they know.

3. Build financial literacy. You cannot evaluate a resolution plan without reading a balance sheet. You cannot advise on Section 29A eligibility which governs who can and cannot bid for a distressed company without understanding related party exposure and NPA classifications. Even basic financial literacy will distinguish you from most lawyers in the room.

4. Master the drafting. Section 7 and Section 9 applications are the entry points to the entire process. The quality of your evidence, documentation, and pre-emptive argumentation determines whether a matter gets admitted quickly or litigated for months. This is a learnable skill but only through practice and exposure to good precedents.

5. Know the landmark judgments. The IBC has produced some of the most important corporate law decisions in Indian legal history. Swiss Ribbons (2019) upheld the constitutional validity of the Code and clarified the financial/operational creditor distinction. Essar Steel CoC (2019) settled the supremacy of the CoC's commercial wisdom in approving resolution plans. Vidarbha Industries (2022) introduced judicial discretion in Section 7 admissions, a significant shift in how creditors approach filing strategy. These cases don't just state the law; they reveal how courts balance competing interests, which is exactly the thinking you need to develop.

The Mindset That Separates Good from Great

Here is what no textbook will tell you: insolvency law rewards lawyers who think commercially, not just legally.

When a client calls in distress, they don't need you to recite the CIRP timeline. They need you to help them think. Should we file now or wait? Can we still restructure out of court? What happens to our security interest once the moratorium kicks in? Is there a deal here, or is this heading to litigation?

The lawyer who can hold all of that the law, the strategy, the client's real interests is the one who becomes genuinely indispensable. That commercial instinct is the hardest thing to teach. But it is also the thing you should be deliberately building from day one.

Where to Build the Knowledge

For those serious about entering this space, the path is more accessible than ever, but only if you invest in the right kind of learning. Law firms actively look for candidates who can demonstrate practical understanding of the IBC, not just academic familiarity.

The Professional Certificate in Insolvency & Restructuring Practice by Into Legal World by INTO LEGAL WORLD is one of the few programs in India that takes this seriously. Rather than teaching the Code chapter by chapter, it walks you through the actual lifecycle of an insolvency matter- from financial distress and pre-insolvency strategy, through CIRP proceedings, to resolution plans, liquidation, and distressed M&A. Faculty includes practitioners from Khaitan & Co., PSL Advocates & Solicitors, and CMS IndusLaw, people who have argued these matters and sat in these CoC rooms.

It is the kind of exposure that otherwise only comes from being inside a firm already doing this work.

A Final Word

Insolvency law is demanding, fast-moving, and genuinely important work. It touches creditors fighting to recover money, employees whose futures hang in the balance, promoters trying to save what they built, and an economy that needs functional capital markets to grow.

The lawyers who thrive here are those who start learning early, stay curious, and are willing to do the unglamorous work before the high-stakes arguments. The cases are already out there. The only question is whether you'll be ready when they arrive.