Foreign Currency Claims in Turkish Bankruptcy Proceedings

yazarı lawyerfbc

açık Ocak 15, 2026

1) Why Foreign Currency Claims Become a “Core Issue” in Bankruptcy

Foreign currency receivables—USD, EUR, GBP and others—are common in cross-border trade, shipping, construction, tech, and financing transactions connected to Türkiye. When the debtor enters bankruptcy, the creditor’s headline concern is no longer only existence of the debt, but also:

How the claim is registered in the bankruptcy estate (masa),
Which exchange rate applies for conversion,
Whether and how interest continues after the bankruptcy opening,
How the claim is ranked among other creditors,
Whether the claim can be satisfied from collateral (if secured),
How objections and litigation will be handled when the estate disputes currency, rate, interest, or priority.

Because FX movements can be dramatic, the legal “conversion moment” and “interest mechanics” may materially change recovery. A well-prepared creditor can protect value; a poorly prepared one may see its claim diluted or contested.

2) Legal Framework in Türkiye: The Core Concepts (Without Getting Lost in Numbers)

Foreign currency claims in bankruptcy are governed primarily by:

Turkish Execution and Bankruptcy Law (İcra ve İflas Kanunu – İİK): claim filing/registration, verification, distribution, ranking, secured creditors, objections and lawsuits.
Turkish Code of Obligations (Türk Borçlar Kanunu – TBK): performance in foreign currency, default, interest principles, damages.
Commercial legislation and special laws depending on the relationship (sales, carriage, banking/finance, leasing, insurance, etc.).
Interest legislation (statutory default interest and, where applicable, commercial default interest concepts), plus contract provisions.

In practice, bankruptcy administration applies a standard insolvency logic: the estate needs a common accounting unit (typically Turkish Lira) for list-making and distribution. That reality drives the conversion debate.

3) What Counts as a “Foreign Currency Claim” in Bankruptcy?

A “foreign currency claim” generally includes:

Receivables denominated directly in FX
Example: “Payment of EUR 250,000 plus interest.”
Receivables indexed or linked to FX
Example: “TRY principal payable equivalent to USD amount at payment date.”
Damages/penalties calculated by FX benchmarks
Example: liquidated damages fixed in USD per day.
Claims evidenced by FX instruments
Example: promissory notes, invoices, loan schedules, charterparty hire in USD, etc.

Key practical point: the estate will usually require clear proof of denomination: contract currency clause, invoice currency, SWIFT details, account statements, acceptance records, delivery/performance evidence, and a coherent interest computation.

4) The “Conversion Rule”: Why the Date Matters More Than the Currency

In insolvency, the estate needs a consistent monetary base for:

preparing the schedule of claims (sıra cetveli),
assessing priority and pro-rata distributions,
comparing claims across creditors.

That leads to the central question:

At which point is a foreign currency claim converted into TRY for registration and distribution purposes?

While the exact treatment can vary by procedural posture and the nature of the claim, the general insolvency logic in Türkiye is that the claim is registered in the estate’s accounting currency using an exchange rate tied to an insolvency-relevant date (commonly connected to the opening of bankruptcy or the registration stage). The aim is to prevent unequal outcomes caused by post-opening currency swings.

Practical takeaway for creditors:
When filing, provide (i) the FX amount, (ii) the TRY equivalent using the relevant rate, and (iii) a transparent rate source (typically Central Bank indicative rates or widely accepted banking rates), together with a computation table.

5) Claim Registration Process: How a Foreign Creditor Should File (Step-by-Step)

A foreign (or domestic) creditor with an FX receivable typically should prepare a filing package that is “bankruptcy-proof.” Strong filings reduce the risk of partial acceptance, objections, or being forced into a longer lawsuit.

5.1. Core documents

Contract (or underlying legal basis): sales agreement, loan, lease, charterparty, service agreement, etc.
Invoices and delivery/performance proof: bills of lading, CMR, acceptance certificates, emails, work completion minutes.
Payment history: bank statements, SWIFT messages, account reconciliation.
Default evidence: notice letters, emails, maturity dates, acceleration notices (if applicable).
Interest clause evidence: contract interest terms, default provisions, and calculation method.
For secured claims: pledge/mortgage documents, registration records, valuations, and enforcement status.

5.2. Filing format for FX claims (best practice)

State the claim as:
Principal: USD/EUR amount
Interest: type (contractual/statutory), start date, rate, compounding (if any)
TRY Equivalent: conversion at specified rate/date, with calculation table
Priority assertion: secured/unsecured; privilege/priority basis if any
Evidence list: numbered and referenced

5.3. Translation and formalities
Foreign documents may need certified translations depending on the forum and the document type. In contested cases, inadequately translated documents become a frequent objection ground.

6) Interest on Foreign Currency Claims: Does It Continue After Bankruptcy?

Interest is often the “second battlefield” after conversion. Creditors typically ask:

Can I claim contractual interest in FX?
Is default interest allowed, and at what rate?
Does interest stop at the opening of bankruptcy?
Can a secured creditor keep earning interest via collateral?

6.1. General insolvency logic
Bankruptcy aims to preserve equality among creditors. In many insolvency systems (including Türkiye’s practice approach), post-opening interest on unsecured claims is restricted because allowing it can distort pro-rata distribution.

6.2. Contractual vs statutory interest

If the contract clearly sets an interest rate and method, the creditor will typically claim it up to the insolvency-relevant cut-off recognized by the administration/court practice.
If the contract is silent, the creditor often claims statutory/commercial default interest principles (depending on relationship type).

6.3. Secured claims and interest
A secured creditor’s economic position differs. If the collateral value sufficiently covers principal and interest, the secured creditor may seek recovery from collateral proceeds (subject to insolvency rules, ranking, and costs). However, excess portions may fall into unsecured status.

Practical creditor tip: Always split your claim into:

secured portion (up to collateral value), and
unsecured remainder (if any),
and compute interest with that structure in mind.

7) Priority (Ranking) of FX Claims: Currency Doesn’t Create Priority—Nature Does

A foreign currency denomination does not itself give the claim higher ranking. Priority depends on the legal nature of the claim and whether it is secured or privileged.

7.1. Secured vs unsecured

Secured creditors (mortgage, pledge, certain lien-like rights recognized under Turkish law) generally get paid from collateral proceeds, subject to statutory distribution rules, enforcement expenses, and sometimes competing secured interests.
Unsecured creditors share pro-rata in the general estate according to ranking classes.

7.2. Typical privileged categories
Depending on Turkish insolvency rules, privileges may exist for items such as certain employee claims, some public receivables, and other legally privileged debts. The exact ranking depends on the classification in the bankruptcy regime.

7.3. Cross-border misconception
Foreign creditors sometimes assume a “foreign element” changes priority. It generally does not. Priority is driven by Turkish insolvency law and the existence/validity of security interests enforceable in Türkiye.

8) Set-Off (Takas/Mahsup) and FX Claims: A Powerful Tool When Available

Set-off can dramatically improve recovery because it can eliminate the need to stand in line for distribution.

8.1. Basic concept
If the creditor and debtor owe each other mutual debts, the creditor may seek to set off to the extent permitted by insolvency rules.

8.2. Special insolvency sensitivities
In bankruptcy, set-off is typically more controlled because it can prejudice other creditors. Issues include:

whether the mutual debts existed before the bankruptcy opening,
whether the creditor acquired the claim in a way that unfairly improves position (e.g., suspicious assignments),
whether the debts are due and enforceable,
whether currency differences prevent set-off (often resolved via conversion mechanics).

8.3. FX complexity
If one side is TRY and the other is FX, you must propose:

a conversion approach (rate and date),
a netting statement with computations,
evidence that mutuality requirements are met.

9) Avoidable Transactions and FX Claims: When the Estate Challenges Pre-Bankruptcy Payments

Bankruptcy administrations may challenge certain transactions made before bankruptcy if they unfairly prefer one creditor or reduce the estate. For foreign creditors, typical risk areas include:

last-minute payments in FX shortly before bankruptcy,
granting security in favor of an existing FX debt,
assignment of receivables or transfer of assets at undervalue.

If the estate alleges avoidance, the creditor may face litigation to return what it received. This is not unique to FX claims, but FX payments often attract attention because they are traceable in banking records.

10) Disputes: The Most Common Objections Against FX Claims

Even strong FX claims get challenged. The most common objection themes:

Currency mismatch
Estate says the contract is TRY, creditor says FX (or vice versa).
Exchange rate disagreement
Dispute about which date and which rate source applies.
Interest calculation errors
Wrong start date, wrong rate, compounding not agreed, or post-opening interest demanded contrary to insolvency limitations.
Insufficient evidence of performance
Invoice exists but delivery/performance proof is weak.
Assignment/standing issues
If claim was assigned, estate challenges validity, notice, or authority.
Security validity
Estate challenges perfection/registration of pledge/mortgage, scope of secured amount, or priority among secured parties.

Practical advice: Include a one-page “Claim Summary Table”:

Principal (FX)
Interest (FX)
Total (FX)
Conversion rate, date, and TRY equivalent
Security details and secured/unsecured split
Evidence list references

This reduces the “administrative friction” that triggers objections.

11) Drafting Strategy: How to Write an FX Claim Petition That Gets Accepted

If you want your filing to be persuasive and resilient:

11.1. Use the estate’s language: clarity and auditability
Bankruptcy administrations think like auditors. Give them:

a clean timeline,
numbered exhibits,
a calculation annex (Excel-like formatting),
transparent exchange rate sourcing.

11.2. Present alternative computations
If there is any plausible dispute about the conversion date, provide:

Primary computation (your view),
Secondary computation (alternative),
and explain why your primary is legally correct. This shows good faith and makes partial acceptance more likely.

11.3. Separate principal, interest, and costs
Do not bundle. Estates dislike “single lump sum” claims in contested files.

12) Worked Example: Converting and Presenting an FX Claim

Scenario:

Contract price: USD 100,000
Maturity: 1 May 2025
Bankruptcy opening: 1 October 2025
Contract default interest: 8% annual (simple)
Creditor files claim shortly after opening.

Presentation approach:

Principal: USD 100,000
Interest period: 1 May 2025 → 1 October 2025 (153 days)
Interest amount (simple):
USD 100,000 × 0.08 × (153/365) = USD 3,351. (rounded)
Total (FX): USD 103,351
TRY equivalent: convert using the rate tied to the legally relevant insolvency date used for registration (state the rate source and date)
Attach the calculation sheet and the rate printout/source reference.

This style makes it easy for the estate to accept or to pinpoint exactly what it disputes.

13) Cross-Border Notes: Foreign Judgments, Arbitration Awards, and FX Claims

Foreign creditors often hold:

foreign court judgments,
arbitration awards,
settlement agreements governed by foreign law.

Key point: In Türkiye, to use a foreign judgment/award effectively—especially for enforcement or to strengthen claim recognition—creditors typically need to consider recognition/enforcement mechanisms (depending on instrument type). Even when you file in bankruptcy, the estate may request clarity on enforceability and finality.

Practical effect in bankruptcy:
A foreign award/judgment can be excellent evidence of debt existence and amount, but the estate may still scrutinize:

whether it is final/binding,
whether due process conditions are met,
whether the debtor identity matches precisely,
whether the currency/interest terms are clear enough for registration.

14) Compliance and Currency Controls: Do FX Restrictions Affect Bankruptcy Claims?

Türkiye has had periods of regulatory measures affecting FX transactions in the economy (especially for certain domestic contracts). In insolvency, however, the question usually becomes practical:

Is the underlying FX obligation valid under applicable rules?
Is it a permitted currency clause given the transaction type and parties?
If restrictions apply, could the debt be re-characterized (e.g., TRY payable equivalent)?

A careful creditor will attach contractual and factual context showing why the FX denomination is lawful and commercially standard (e.g., cross-border supply, import/export, non-resident party involvement, internationally priced commodity, etc.).

15) Litigation After Objection: What Happens If the Estate Rejects or Reduces the FX Claim?

If the bankruptcy administration rejects the claim fully or partially, the creditor typically faces a choice:

accept the reduced amount (not recommended if difference is material and you have evidence),
initiate/continue the relevant claim determination litigation under insolvency procedure,
negotiate a settlement with the estate (sometimes possible for calculation-only disputes).

What wins FX disputes most often:

clean documentary chain,
consistent accounting records,
clear currency clause and payment history,
professional calculation annex,
credible exchange-rate sourcing,
disciplined interest logic aligned with insolvency limits.

Conclusion: Protect the FX Value by Filing Like an Auditor, Arguing Like a Litigator

Foreign currency claims in Turkish bankruptcy are not “hard” because the debt is foreign; they are hard because bankruptcy requires standardization (conversion), equality (limits on post-opening accretions), and proof discipline (document-heavy verification). If you want maximum acceptance and minimum objection risk:

present a clean FX + TRY computation,
use transparent exchange-rate sourcing,
split principal/interest/costs and secured/unsecured portions,
attach a litigation-ready evidence set.

Done properly, an FX creditor can preserve substantial value even in a volatile currency environment—especially where security or set-off options exist.

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