Foreign-currency debt in Russian bankruptcy does not remain a constantly moving figure in the creditor register: it is converted into roubles under Article 4 of the Bankruptcy Law. A foreign-currency mortgage is different from an unsecured loan because the lender has security over the property. The outcome therefore depends on the applicable exchange-rate date, the admitted claim, the property’s value and any arrangement for retaining the home.
In brief: three questions that determine the outcome
The main distinctions
| Situation | Bankruptcy consequence |
|---|---|
| Unsecured foreign-currency loan | The claim is stated in roubles for the legally relevant date; an unpaid balance may be discharged if no exception applies. |
| Foreign-currency mortgage | The secured lender has priority and the mortgaged home may generally be sold even if it is the debtor’s only home. |
| Sole mortgaged home and lender agreement | Article 213.10-1 permits a separate court-approved settlement that can keep the home outside the sale. |
| Sale of a sole mortgaged home | A special distribution rule in Article 213.27-1 has applied since 2026. |
How is the foreign-currency claim converted?
Article 4 provides that monetary obligations expressed in foreign currency are determined in roubles at the official Bank of Russia rate on the date when each bankruptcy procedure following maturity of the relevant obligation is introduced. It is therefore unsafe to assume the rate on the loan date, filing date or publication date; the legally relevant date must be identified for the particular claim.
The lender submits a calculation of principal, interest, penalties and other contractual amounts. The debtor may challenge the exchange rate, date, arithmetic and composition of the claim. The arbitrazh court checks the calculation when admitting it to the register.
The currency of account and currency of payment may differ.
Article 4 controls the rate, not a party’s preferred date.
Principal, interest and sanctions should be reviewed separately.
What happens to a foreign-currency mortgage?
The mortgage continues to secure the lender’s claim. Article 50 of the Mortgage Law allows enforcement where the secured obligation is not performed, including when bankruptcy proceedings have been opened against the debtor.
The protection normally given to a sole home does not by itself protect mortgaged property where enforcement is legally available. In bankruptcy, the property is sold under special rules and the secured lender has priority in the proceeds.
Distribution of sale proceeds
Under the general rule in Article 213.27, eighty per cent of proceeds from secured property goes to the secured creditor. The balance is reserved for first- and second-priority claims and procedure costs in the statutory order; any unsecured shortfall ranks in the third priority.
For a sole mortgaged home, Article 213.27-1 introduced a special rule in 2026. After preservation and sale costs, eighty per cent of the relevant proceeds, capped by the secured claim, goes to the mortgage lender. The article also provides for a payment to the debtor within statutory conditions and limits. The calculation depends on the initial deposit, payments already made, expenses and creditor claims.
Can the debtor keep the sole mortgaged home?
Article 213.10-1 permits the individual and mortgage lender to enter into a separate settlement approved by the arbitrazh court. The rule applies to cases opened after 8 September 2024 and to earlier cases where the home had not been sold by that date. It does not bind other creditors. Their consent is generally unnecessary, although all admitted mortgagees must participate where there is a subsequent mortgage.
Once approved, the home and its land are not sold in the bankruptcy case, the mortgage remains and payments continue under the settlement. Protected income, post-procedure income or payments by a third party may fund performance. Existing arrears must be addressed by the settlement.
Promises that should not be made
- that the bank must recalculate the loan at an old or preferential rate;
- that a sole mortgaged home can never be sold;
- that exchange-rate growth automatically cancels the agreement;
- that the court will approve a separate settlement without the secured lender;
- that every remaining balance will be discharged regardless of conduct and the nature of the claim.
Documents for review
- the loan agreement, schedule, amendments and mortgage instrument;
- payment records in foreign currency and roubles;
- the lender’s breakdown of principal, interest and sanctions;
- court orders and register information;
- the property valuation and evidence of the initial deposit;
- information about family members and any other residential property;
- the lender’s restructuring or settlement proposals.
Frequently asked questions
Does the registered claim keep changing with the exchange rate?
The register claim is determined in roubles under Article 4. Current calculations and the consequences of moving between procedures still require case-specific review; saying that the rate is simply “fixed forever” is too broad.
Is the mortgage shortfall discharged after the home is sold?
The unsecured shortfall is treated under the third-priority rules. It may be discharged at the end of the procedure if no statutory exception or ground for refusing discharge applies.
Can a relative pay the mortgage and keep the home?
A third party may join the separate settlement and undertake payments. This must be reflected in court-approved terms; informal payments alone do not remove the property from the estate.
Is an official exchange rate required?
Yes. The official Bank of Russia rate for the legally relevant date is used and can be checked in the regulator’s currency database.
Official legal sources
- Russian Bankruptcy Law, Article 4
- Article 213.10-1: separate mortgage settlement
- Article 213.27: distribution to creditors
- Article 213.27-1: sole mortgaged home
- Russian Mortgage Law, Article 50
- Bank of Russia official currency database
Related guidance
- Keeping a mortgaged home through a separate settlement
- Russian personal bankruptcy procedure
- Personal bankruptcy legal service
Need a foreign-currency loan or mortgage calculation?
At a paid initial consultation, a lawyer will review the agreement, conversion date and rate, security status and lawful options for retaining the home. No outcome is guaranteed in advance.