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Debt Collection Procedure in Turkey

How to Solve a Debt Collection Problem in Turkey

Two major mechanisms exist to begin debt collection in Turkey

Enforcement  without a court judgment (called in Turkish: "ilamsız icra takibi" ) and
Enforcement with a court judgment ( called in Turkish: "ilamlı icra takibi" ).

This article looks at the debt collection process in Turkey and provides suggestions as to how to recover the debt in Turkey.

1. Enforcement without a Court Judgment

Three forms of implementation are available:

  • Enforcement using general seizure proceedings ( called in Turkish: "genel haciz yoluya takip" ),
  • Enforcement using issued bonds ( called in Turkish: "kambiyo senedine özgü takip yolu" ) and
  • Eviction of rented properties enforcement ( called in Turkish: "kiralanan taşınmazların ilamsız icra yolu ile tahliyesi" )

The general enforcement procedure will be discussed more in detail for the purposes of this article.

The creditor sends an application for debt collection to the correct loan execution office (the debtor's residence). The debtor can appeal to the payment order within 7 days of a written notice for payment of the debt by:

  • Opposition to a signature (imzaya itiraz): if the debt is created by an act and if the debtor insists that it is not the signature on the act (i.e., counterfeit / fraud), the debtor may object by opposing the signature to the debt execution office.
  • Objecting debt (borca itiraz): if the debtor claims that he or she does not completely owe the applicable debt, or claims that the creditor has no right to order debt collection against him, the debtor may object and challenge the debt.
  • Rejection of Authority (Yetkiye itiraz): when the debtor thinks that it is not the debt collection entity that has started the debt collection procedure, the debtor may complain to the debt recovery authority for not having the power to carry out the debts compliance.
Court of Justice of Istanbul

The execution proceedings will be stopped in the case that the borrower objected to the compensation request (ödeme emri). The claimant can, however, either file a reversal action (itirazın iptali daası) or, a reversal action for a reversal of the objection (itirazın kaldırılması sabası, or an action for the abolition of the objection (itirazın kaldırılması daası), in order to enforce the continuation of the execution and annul the opposition resolution.

If the creditor wins this case and revokes the objection agreed, then the implementation of the debt collection becomes final and the creditors may continue with the debt enforcement proceedings as though the debtor had never objected in the first place to the debt collection. If the borrower loses the case and the intent is withdrawn, the debtor must retrain the debtor's compliance process, and the creditor will be disciplined by the repudiatory fee (icra inkars tazminatı), which will equate to at less than 20 percent of the value of the entire debt.

It ensures that the records you submit are of those issued according to Article 68 and can not be taken in litigation for the abolition of the complaint UNLESS. The appeal may be initiated by the borrower to be extinguished by the compliance court within 6 months after the debtor challenge to the debt collection.

The creditor no longer holds the right to request this kind of case after 6 months have passed since the debtor objection date. In fact, because of the lapse of time the judge may determine sua sponte to dismiss the request. The action taken to eliminate the complaint was subdivided into two types: complete abolition of the opposition and partial abolition of the objection.

That would be the consequence of the intervention of the claimant to eradicate the objection on his / her own motion without the formal request by the other group. If the debtor's opposition to receiving the debt is attributable to an argument against the debt and the law, then the creditor will request for the complete abrogation of the complaint whereas the creditor can ask for the immediate abolition of the objection on grounds of challenge to the signature.

B. Enforcement Proceedings with a Court Judgment

This is the type of claim based on an enforceable court judgment. In this case, any objection the debtor may claim within 7 days after the receipt of summons will be disregarded by the court in a summary proceeding.

In contrast to the enforcement proceedings without a court judgment, where the debt enforcement order is referred to as the "payment order" which is sent to the debtor, in enforcement proceedings with a court judgment, the debt enforcement order is referred to as the "debt collection order".

How to Collect in Turkey using the Court

Just as every other type of debt enforcement process under Turkish law, enforcement proceedings with a court judgment is issued by the submission of a "request to enforcement proceedings". This request document shall contain: the names-surnames and addresses of the debtor and the creditor and the debt value, including the interest rates.

Pre-Condition to Litigation for Commercial Disputes: Mediation

With the recent amendments to the Law no. 7155, a mandatory mediation process before initiating litigation for commercial disputes entered into force, as of 1 January 2019. This new law the scope of mediation as an alternative dispute resolution tool is extended to capture commercial disputes and not only disputes related to employment matters.

Please click here for further information about the mediation process for commercial disputes – or contact us for further suppport.
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