Turkish Company Is Being Liquidated While Owing Money Abroad: What Should Foreign Creditors Do? – 2026 Updated Guide

Turkish Company Liquidation | Foreign Creditor Rights

Learn what foreign creditors should do when a Turkish company enters liquidation while owing money, including claim registration, enforcement, asset protection and court remedies.

A Turkish company may enter liquidation while still owing money to a foreign supplier, lender, contractor or business partner. Foreign creditors should act quickly because liquidation may involve asset sales, creditor payments, company closure and final distribution to shareholders.

Liquidation does not automatically cancel the company’s debts. The company continues to exist for the purpose of completing the liquidation, collecting assets and paying creditors.

This 2026 updated guide explains what foreign creditors should do when a Turkish company is being liquidated.

What Does Liquidation Mean for a Foreign Creditor?

Liquidation is the process of closing the company, collecting its receivables, selling assets, paying debts and distributing any remaining value.

A company in voluntary liquidation may still have sufficient assets to pay its creditors. Liquidation should not automatically be confused with bankruptcy or complete insolvency.

The foreign creditor should determine whether the company is solvent, whether the liquidation is voluntary or court-related and who has been appointed as liquidator.

Does Liquidation Cancel an Unpaid Debt?

No. An unpaid invoice, loan, service fee, delivery claim or damages claim does not disappear simply because the company enters liquidation.

The creditor should submit the claim to the liquidator and preserve the right to pursue enforcement or litigation if the debt is disputed or ignored.

The company’s remaining assets should generally be used to address creditor claims before any final distribution to shareholders.

What Should the Foreign Creditor Do First?

The creditor should confirm the company’s current legal status, liquidation date, liquidator, registered address and official notices.

The creditor should immediately collect the contract, invoices, delivery documents, payment records, account statements, correspondence and any acknowledgment of debt.

The creditor should not wait for the liquidator to contact them. A formal claim submission should be prepared and delivered through a method that proves receipt.

How Should the Claim Be Submitted?

The foreign creditor should submit a written statement identifying the legal basis and amount of the claim.

The submission should include invoice numbers, contract details, delivery or performance evidence, payment history, interest calculation and supporting documents.

If the amount is disputed, the creditor should explain why the objection is unfounded and expressly reserve the right to begin enforcement or court proceedings.

Foreign documents may require official translation, certification, legalization or apostille procedures.

What If the Liquidator Rejects the Claim?

The liquidator may reject the claim completely or accept only part of it. The creditor should request the reason for the rejection and preserve all correspondence.

A disputed claim may need to be established through enforcement, a commercial lawsuit or arbitration, depending on the contract and applicable procedure.

The creditor should act quickly because liquidation deadlines and procedural periods may apply. A claim submitted to the liquidator is not always a substitute for formal litigation.

Can the Foreign Creditor Start Enforcement?

If the debt is due and sufficiently documented, the foreign creditor may be able to start or continue a monetary enforcement proceeding in Turkey.

If the company objects, the creditor may need to challenge the objection or prove the debt through a commercial lawsuit.

The creditor should notify the liquidator and examine whether enforcement against the company’s remaining assets is possible.

Can Assets Be Frozen During Liquidation?

A foreign creditor may request provisional attachment where there is a due monetary claim and a risk that collection will become difficult.

The measure may concern bank accounts, real estate, vehicles, shares, inventory or receivables owed to the company by third parties.

The court may require security, and an attachment is not automatic. If the company is already selling assets, urgent legal protection should be considered without delay.

What If the Company Transfers Assets Before or During Liquidation?

The creditor should investigate any transfer of real estate, vehicles, shares, inventory, contracts, customers or funds to shareholders, directors or related companies.

A legitimate sale made at a fair market value is not automatically unlawful. However, a transfer designed to prevent creditors from collecting may be challengeable.

The foreign creditor may consider a cancellation of disposition or fraudulent-transfer action and may seek recovery of the transferred value.

Can the Foreign Creditor Monitor the Liquidation?

The creditor should monitor asset sales, creditor payments, financial statements, company records and communications issued by the liquidator.

The creditor may request information relevant to the claim and should examine whether assets are being sold at reasonable prices.

If the liquidator fails to protect company assets, prefers connected persons or distributes value improperly, the creditor may need to seek judicial protection or pursue liability claims.

What Is the Priority of Foreign Creditors?

Priority depends on the nature of the claim, security rights, guarantees and applicable legal rules.

Secured creditors, employee claims, public claims and other legally preferred debts may affect the amount available to an unsecured foreign supplier.

The creditor should identify whether it has a mortgage, pledge, guarantee, retention-of-title right or another security interest.

Can Directors or the Liquidator Be Held Liable?

Directors and shareholders are not automatically personally liable for company debts.

Personal liability may arise from guarantees, fraud, misuse of company assets, unlawful transfers or conduct that independently causes damage.

A liquidator may also face liability for failing to perform liquidation duties properly or distributing company value without addressing creditor claims.

The creditor must prove the specific conduct and damage.

Can a Criminal Complaint Be Filed?

A criminal complaint may be considered where the liquidation process involves forged documents, fraud, breach of trust, false accounting or deliberate asset concealment.

A company’s inability to pay or lawful liquidation is not automatically a criminal offense.

Criminal proceedings do not automatically recover the debt. The foreign creditor may also need enforcement, commercial litigation and asset-recovery measures.

What Evidence Matters in 2026?

In 2026, electronic invoices, accounting software, online banking records, cloud documents, corporate emails and business messages may be important for proving the debt and tracing assets.

The creditor should preserve original files, complete communication chains, payment confirmations, liquidation notices and evidence of related-party transfers.

A financial expert may help calculate the outstanding balance and identify unexplained payments or asset movements.

Can a Foreign Creditor Act from Abroad?

A foreign creditor does not always need to travel to Turkey. A Turkish lawyer may act under a power of attorney issued before a Turkish consulate or local notary.

Depending on the issuing country, legalization, apostille and official translation may be required. Foreign company documents and debt evidence may also need certification.

Lawyer Fırat Fesih Kaya assists foreign creditors with liquidation claims, commercial enforcement, provisional attachment, asset tracing and cross-border debt recovery.

2026 Legal Considerations

Foreign creditors should submit their claims promptly and monitor the company until liquidation is completed. Waiting for the company to close may make evidence and assets more difficult to recover.

A practical strategy may combine claim registration, enforcement, provisional attachment, inspection of liquidation records and challenges against fraudulent transfers.

The applicable rules on liquidation, bankruptcy, creditor priority, enforcement, mediation and procedural deadlines should be reviewed before action is taken.

Frequently Asked Questions (FAQ)

1. Does Turkish company liquidation cancel foreign creditors’ claims?

No. The debt continues to exist and should be submitted to the liquidator and pursued through the appropriate legal procedure.

2. Should a foreign creditor contact the liquidator immediately?

Yes. The creditor should submit a documented claim and preserve proof of delivery.

3. Can a rejected liquidation claim be challenged?

The creditor may need to pursue enforcement, commercial litigation or arbitration depending on the reason for rejection and the contract.

4. Can a creditor request provisional attachment during liquidation?

A provisional attachment may be requested if the legal conditions are satisfied and there is a risk to collection.

5. What if the company transferred assets to a related company?

The transfer may be investigated and challenged if it was fraudulent, sham or designed to defeat creditors.

6. Can the creditor monitor company asset sales?

The creditor should monitor liquidation records and request relevant information concerning assets and payments.

7. Are foreign creditors paid before shareholders?

Shareholders generally receive liquidation value only after creditor claims and required expenses are addressed, subject to applicable priority rules.

8. Can the liquidator be personally liable?

Potential liability may arise from misconduct, improper distribution or failure to protect company assets.

9. Can a criminal complaint be filed during liquidation?

It may be possible where there is evidence of fraud, forged records, breach of trust or deliberate asset concealment.

10. Can a foreign creditor act without traveling to Turkey?

In many cases, yes. A Turkish lawyer may act under a valid power of attorney.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Expert Legal Support for Foreign Creditors

A Turkish company’s liquidation does not necessarily end a foreign creditor’s recovery prospects. Prompt claim registration, asset monitoring, enforcement and protection against fraudulent transfers may be essential.

Fırat Fesih Kaya Law Office provides professional legal support to foreign creditors in liquidation claims, commercial debt recovery, provisional attachment, asset tracing and cross-border litigation.

Call: +90 312 434 22 22
WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yildirim Tower, Balgat, Cankaya, Ankara, Turkey