Debt collection in Turkey is an integral part of financial transactions, ensuring the fulfillment of financial obligations. In Turkey, debt collection procedures are governed by specific laws and regulations that provide a framework for both creditors and debtors.
The legal framework for debt collection in Turkey is primarily governed by the 2004 numbered Execution and Bankruptcy Law (İİK) and related regulations. These laws outline the rights and obligations of both parties involved into debt collection, ensuring a fair and transparent enforcement process. A real person or a legal entity may be in the tendency not to pay its debts. In order to force the debtor to pay its debts, the creditors may apply to several methods to collect its receivables.
If you are interested to obtain information related to law services for debt collection in Turkey, this essay prepared by our debt collection lawyers in Turkey is just for you.
What is Debt Collection Lawyer in Turkey
A debt collection lawyer in Turkey is a legal professional registered in relevant Bar Association who specializes in debt recovery and provides legal services to creditors seeking to collect unpaid debts from individuals or entities.
These lawyers possess in-depth knowledge of the Turkish legal system, including relevant laws, regulations, and procedures related to debt collection. A debt collection lawyer in Turkey shall be well-versed in negotiation techniques, dispute resolution mechanisms, drafting agreements, filing and following up relevant enforcement procedures and litigation for collection of debt strategies. Debt collection lawyers in Turkey serve as intermediaries between creditors and debtors, employing legal knowledge and negotiation skills to find amicable resolutions whenever possible.
Responsibilities of a debt collection lawyer in Turkey are mainly as follows:
- A debt collection lawyer in Turkey shall provide legal consultation to their creditor clients regarding their rights and options for debt recovery.
- A debt collection lawyer in Turkey shall verify the validity of the debt by examining contracts, invoices, loan agreements and/or other relevant documents provided by their creditor client. This step will ensure the debt is legally enforceable and strengthens the creditor’s position during negotiations or legal proceedings.
- A debt collection lawyer in Turkey shall first engage in negotiations with debtors on behalf of their clients as a pre-legal debt collection method in Turkey with the aim to reach a mutually acceptable settlement which may include discussing repayment plans, reduced settlement amounts, alternative options of the debtor and payment methods.
- A debt collection lawyer in Turkey shall proceed by filing litigation or initiate relevant enforcement procedures in order to collect the debt if amicable settlement attempts fail.
Pre-legal debt collection procedure in Turkey
Pre-legal debt collection procedures in Turkey play a crucial role in facilitating the recovery of outstanding debts before resorting to formal legal actions. These procedures aim to encourage debtors to fulfill their financial obligations voluntarily, while also protecting the rights of both creditors and debtors. A pre-legal debt collection process typically begins with the creditor’s initial communication with the debtor.
This communication can occur through various channels, including written notices, e-mails, or phone calls. The creditor informs the debtor about the outstanding debt, its amount, and the need for prompt payment. If the debtor does not respond to the initial communication or fails to fulfill their obligations, the creditor may send warning letters through notary public.
These letters serve as formal notifications, clearly stating the consequences of non-payment and emphasizing the debtor’s legal liability and can be used as proof of non-payment to the relevant court or enforcement office upon non-payment of the debt. If the debtor responds and the debt is verified, the creditor may engage in negotiations with the debtor to reach a mutually agreeable settlement.
This can involve discussions regarding payment plans, reduced settlement amounts, or other feasible arrangement. The goal is always to find a solution that satisfies both parties and avoid legal action.
Lawsuit Proceedings in Turkey
We will try to simplify lawsuit proceedings in Turkey in relation to enforcement procedures and debt collection for our client candidates here.
An enforcement proceeding with confiscation as an enforcement procedure without judgement begins with an enforcement request made by the creditor to the relevant execution office. The relevant execution office, upon receiving the enforcement request, sends a payment order to the debtor.
The payment order instructs the debtor to either make the payment or, if there is an objection to the debts and to the enforcement procedure, notify the execution office, informing them of the objection and that if the debtor fails to comply, their assets will be seized. As a rule, the debtor must present his objections to the payment order within seven days upon acknowledgement of the payment order.
If the debtor fails to object to the payment order within seven days, the payment order becomes final. Subsequently, the execution office seizes the debtor’s assets, sells them, and pays the creditor from the proceeds of the sale. If the debtor objects to the payment order within seven days, the execution proceedings are halted.
In order to continue the enforcement proceedings after the objection, the creditor must file an action for annulment of the objection before the authorized court of first instance (general court) or apply to the execution court for the removal of the objection.
An action for annulment of the objection must be filed within one year from the date of notification of the objection. If the court determines in the lawsuit to cancel the objection that the debtor is indeed indebted, it orders the debtor to pay the debt, and if applicable, the execution denial compensation, and cancels the debtor’s objection.
The creditor can submit the court’s finalized decision to the execution office and request the resumption of the execution proceedings that were halted due to the objection, as well as the seizure of the debtor’s assets. On the other hand, the finalization of the lawsuit upon started upon action for annulment of the objection initiated by the creditor takes long time.
Therefore, if the debt subject to the enforcement procedure is based on one of the documents listed in Article 68-68/a of the Execution and Bankruptcy Law, the creditor can request the removal of the objection from the execution court.
The request for the removal of the objection is also subject to a time limit and this time limit is statute-barred. The creditor can request the removal of the objection from the execution court within 6 months from the date of notification of the objection only.
Alternatively, instead of initiating an enforcement proceeding with confiscation as an enforcement procedure without judgement, it is also possible to file a debt collection lawsuit before the relevant court, depending on the type of the debt.
Types of Debt Recovery in Turkey
We can say that types of debt recovery in Turkey by means of enforcement procedures consists of two main enforcement methods. In Turkish law, enforcement law is divided into two main branches: enforcement with judgement and enforcement without judgement. In enforcement with judgement, the creditor holds a finalized court decision against the debtor.
The creditor initiates enforcement with an enforceable court order by submitting this court decision to the execution office. If the debtor fails to voluntarily fulfill the debt within the 7-day period granted by the execution office, the court decision is enforced forcibly by the execution office.
In enforcement without judgement, it is not a requirement for the creditor to have obtained a court decision determining the debt. In enforcement without judgement, the creditor can initiate the enforcement by submitting a document proving the debt, such as money or collateral, and/or by specifying the reason for the debt.
Debt Collection For Foreigners in Turkey
Debt collection for foreigners in Turkey is possible by means of Law. As a general rule, individuals who do not reside in Turkey and/or are not Turkish citizens can initiate debt collection proceedings through the relevant execution offices in Turkey. Since foreigners may not be familiar with Turkish laws, it is beneficial for them to conduct the relevant debt collection process through a debt collection lawyer in Turkey.
According to Article 48 of the International Private and Civil Procedure Law, foreign individuals and legal entities who file a lawsuit, participate in a lawsuit, or engage in debt collection proceedings in Turkish courts must provide security determined by the court to cover litigation and enforcement costs, as well as the counterparty’s damages.
However, the court may exempt the plaintiff, participant, or enforcer from providing security based on the principle of reciprocity. Reciprocity is established when there is a bilateral or multilateral judicial assistance (letter rogatory) or exemption agreement between the Republic of Turkey and the state of which the individual, either a natural person or a legal entity, who is required to provide security is a citizen of.
Furthermore, if the debtor resides abroad, it does not prevent the sending of a payment order to them or the initiation of debt collection proceedings in case of non-payment. But in this case enforcement procedures will take much more time to be finalized.
Documents Required to Start Debt Recovery in Turkey
If the debtor fails to fulfill their debt willingly, the creditor has the right to request the enforcement of the debt by the power of the state. If the creditor exercises this right and applies to the relevant execution office, the debtor will be compelled by the force of the state to fulfill the debt. In order to ensure the satisfaction of the creditor’s claim, the assets of the debtor are seized by the enforcement authorities of the state, namely the relevant execution offices, and these assets are sold to pay off the creditor’s debt.
The enforcement authorities have the authority to use force in carrying out these procedures. Since the most common type of enforcement is debt collection through general confiscation as an enforcement procedure without judgement, we will hereby discuss the documents required for this type of enforcement only. Debt collection through general confiscation is generally used for the collection of debts related to the payment of sum of money.
Debt collection through general confiscation begins with the creditor submitting an execution request to the relevant execution office. Upon receiving the execution request of the creditor, the execution office will send a payment order to the debtor, who is required to raise an objection within seven days or pay the amount. If the debtor does not object within seven days, the payment order becomes final.
Afterward, the execution office can seize the debtor’s assets, sells them, and pays the creditor through the sales procedures upon petition of the creditor. The execution request must be made in writing to the relevant execution directorate. The execution request must include the following information thus documents required to start debt recovery in Turkey are as follows:
- The identity and address of the creditor must be specified.
- The identity and address of the debtor must be specified.
- If the requested amount includes interest, the amount of interest, the date from which it accrues, and the interest rate must be indicated.
- If there is no promissory note or bill of exchange, the cause of the debt must be specified. If the claim is based on a document, the original or a copy of the document must be submitted to the execution office along with the execution request, in accordance with Article 58/3 of the Execution and Bankruptcy Law (İİK).
- The execution request must indicate which enforcement method the creditor has chosen.
- The execution request must be signed by the creditor or their representative. If the enforcement is initiated by an attorney, a Power of Attorney must be attached to the execution request.
If you are willing to initiate debt collection through general confiscation as an enforcement proceeding without judgement, you will be required to provide your debt collection lawyer in Turkey the above information and documents.
Turkey Debt Recovery Solutions
Turkey has a well-established legal framework governing debt collection procedures. The 6098 numbered Turkish Code of Obligations (Türk Borçlar Kanunu) and the 2004 numbered Enforcement and Bankruptcy Law (İcra ve İflas Kanunu) provide the legal basis for debt collection in Turkey.
When a debtor fails to fulfill their financial obligations, a creditor may seek the assistance of a lawyer to initiate legal proceedings for debt recovery. Lawyers in Turkey employ various methods to recover debts on behalf of their clients. These methods include negotiation, formal warning letters and legal actions:
- Negotiation: Initially, lawyers in Turkey often attempt to negotiate with the debtor to reach an amicable settlement. This can involve discussing payment plans or debt restructuring to avoid costly and time-consuming legal proceedings to be filed in Turkey.
- Formal Letters: Lawyers in Turkey frequently send formal warning letters to debtors through Notary Publics based in Turkey indicating consequences of non-payment. These letters serve as a last opportunity for the debtor to settle the debt before legal action is taken.
- Legal Actions: If negotiation and formal warning letters prove ineffective, lawyers can initiate legal actions to recover the debt. This can involve filing a lawsuit in civil court or utilizing enforcement procedures under the Enforcement and Bankruptcy Law.
Debt Collection Procedure in Turkey
There are two main types of debt collection procedure in Turkey. If you have invoices and contracts proving existence of the debt, you can directly ‘initiate enforcement proceedings without judgement’ as a debt collection procedure in Turkey, by attaching these documents proving the debt to your enforcement request and present the enforcement request to the relevant enforcement office.
If you file ‘enforcement procedures without judgement’, the debtor will be obliged to pay the debt or object to the debt within one week following the date of service of the payment order. If the debtor files his objections to the debt within one week from the date of service of the payment order, the creditor will be obliged to file a lawsuit which actually is an action for annulment of the objection by the relevant court, in order for continuance of the enforcement procedures and collection of the debt.
However, if you have already initiated a debt collection lawsuit before the relevant court regarding collection of your debt, after the court accepts your case and the decision is finalized, you can initiate ‘enforcement proceedings with judgement’ by submitting the court’s decision to the relevant enforcement office. In this case, the debtor will be required to pay the debt within 7 days.
Can UK debt be enforced in Turkey?
The debtor’s place of residence may be located in a country other than Turkey. Such a case does not prevent the creditor to start enforcement procedures in Turkey and send a payment order to the debtor’s foreign address.
If enforcement proceedings are properly and legally initiated in Turkey and the enforcement request is final and binding, in other words enforcement decision is certain, it will be necessary for the creditor to apply to the relevant authorities in the foreign country for the recognition of the enforcement decision issued in Turkey and physically enforcement/execution of the debtor’s assets located abroad.
Similarly, if you file a debt lawsuit in Turkey and the decision becomes final, it will be necessary to present the reasoned decision to the relevant authorities in abroad in order to make the decision recognized in that country and then proceed with the enforcement/execution of the debt through the competent authorities in the foreign country.
On the other hand, initiating the enforcement procedures directly in the debtor’s country will provide to the creditor significant convenience and efficiency on collecting the debt through local enforcement/execution procedures.
How Do I Collect Debt From Overseas?
It is possible to collect debt from overseas through different procedures. As stated above, the fact that the debtor is based in abroad does not constitute an obstacle for initiating enforcement proceedings against the debtor in Turkey.
Within the scope of the jurisdiction rules in Turkish law, unless it is deemed necessary to initiate enforcement procedures at the debtors place of residence, enforcement procedures may be initiated in Turkey and it may be possible to finalize the proceedings by notifying the payment order to the debtors address based in a country other than Turkey.
However, even if the enforcement decision is finalized in Turkey, it will not be always possible to carry out several enforcement phases such as seizure and sale and collect the total amount in Turkey since assets will be also in abroad. In order to eliminate this inadequacy, it is possible to apply to the European Payment Order procedure.
The European Payment Order procedure is essentially a notice with a payment warning that can be enforced in all member countries of the community without the need for an additional recognition and enforcement lawsuit or procedure to be filed in a foreign country. European enforcement proceedings without judgement begin only upon the application of the creditor.
For application, the printed form Sample-A attached to the European Execution Without Judgemen Regulation must be prepared properly. In order for a European payment order to be issued, an application must be made duly to the courts of one of the member states of the European Union.
Debt Collection Lawyers in Turkey
Are you facing the frustration of unpaid debts, struggling to recover what you’re rightfully owed? We understand that debt collection can be a daunting challenge, and that’s where we step in to provide the solution you need. Welcome to Mesci Law Firm, your trusted partner in debt collection services in Turkey.
With a team of experienced debt collection lawyers, we are dedicated to legally assisting creditors like you recover outstanding debts efficiently, legally, and effectively. Navigating the intricacies of debt collection in Turkey requires expertise in the local legal system, a deep understanding of the unique challenges creditors may face, and a commitment to achieving results. With our debt collection lawyers in Turkey possessing all these qualities, you can confidently obtain a successful debt recovery outcome.
Our team of seasoned lawyers is well-versed in Turkish debt collection laws and regulations. We leverage this knowledge to ensure that your rights as a creditor are protected and enforced. We understand that each debt collection case is unique. That’s why we tailor our strategies to your specific needs, whether it’s negotiating with debtors or pursuing legal actions.
Contact our debt collection lawyers in Turkey and let us take the burden of debt collection off your shoulders, allowing you to focus on what matters most to you. Contact us today and discover how we can help you recover what is legally yours.
What Are Mesci Law’s Debt Collection Services in Turkey?
Debt collection law services in Turkey are governed by a robust legal framework that ensures the enforcement of financial obligations and protects the rights of both creditors and debtors. The legal provisions and procedures in place provide a systematic approach to debt collection, encouraging amicable resolutions while allowing for legal actions when required.
By upholding the principles of fairness and transparency, debt collection law services in Turkey contribute to a healthy business environment and the overall stability of the Turkish economy. While debt collection aims to protect creditors’ rights and interests, it is equally important to safeguard the rights and interests of debtors in Turkey. The legal framework ensures that debtors are not subjected to unfair practices or undue harassment.
Mesci Law Firm is a globally recognized law firm in Turkey consisting of experienced debt collection lawyers in Turkey that are always prepared to handle bankruptcy and debt recovery services in Turkey. Our debt collection lawyers in Turkey plays a significant role in facilitating the recovery of outstanding debts and protecting the rights of both creditors and debtors.
Moreover, our law firm in Turkey represented both domestic and foreigner clients in multiple bankruptcy cases filed before the execution offices of Istanbul. Our debt collection services in Turkey are as follows:
- To initiate enforcement proceedings with judgement and following up such types of enforcement procedures.
- To initiate enforcement proceedings without judgement and following up such types of enforcement procedures and especially to initiate enforcement proceedings with confiscation or enforcement procedures in particular to bills of exchange or enforcement procedures in particular to eviction of rented immovable or enforcement procedures in particular to subscription agreements and following up such types of enforcement procedures.
- To file complaints using the legal remedy of complaint in order to cancel or rectify actions of execution or bankruptcy offices that are contrary to enforcement or bankruptcy regulations.
- Filing and following up actions for annulment of objections.
- Filing and following up negative declaratory actions and/or replevin cases.
- Following up confiscation procedures.
- Following up liquidation of movables and immovables.
- To file lawsuits against dishonored checks.
- To handle transactions related to bankruptcy law.
- To file and follow up postponement of bankruptcy lawsuits.
- To file objections against debt, signature and enforcement procedures.
- To file and follow up removal of objection lawsuits.
If you are willing to collect your debt, do not hesitate to contact our debt collection lawyers in Turkey.
