Debt Collection in Turkey: Enforcement Proceedings and Objections
When a debt is not paid, the creditor can collect it in Turkey through enforcement proceedings (icra takibi) conducted by the state enforcement offices. Turkish enforcement proceedings can be started without first obtaining a court judgment, which makes them a fast and widely used debt collection tool for both Turkish and foreign creditors. Debtors, in turn, have short but effective objection rights. This article by Yetkiner Law Firm explains how enforcement proceedings work in Turkey, the main types of proceedings, how a debtor can object and what a creditor can do after an objection.
What Are Enforcement Proceedings in Turkey?
Enforcement proceedings are the official procedure through which a creditor collects a debt with the help of the state. They are governed by the Enforcement and Bankruptcy Law No. 2004 (İcra ve İflas Kanunu) and carried out by enforcement offices attached to the courts. Proceedings are conducted electronically through the national judicial network (UYAP).
A creditor may initiate proceedings either on the basis of a court judgment (enforcement with a judgment) or without a judgment, on the basis of a claim alone (enforcement without a judgment). In practice, most commercial and private debts are collected through enforcement without a judgment.
Types of Enforcement Proceedings
Enforcement Without a Judgment (General Attachment)
The creditor applies to the enforcement office with a request stating the amount of the debt and its basis, such as a contract, invoice or loan. The enforcement office then sends a payment order (ödeme emri) to the debtor. The debtor has seven days from service to object and, if no objection is made, the proceedings become final and the creditor can request attachment of the debtor’s assets.
Enforcement Based on Negotiable Instruments
For debts based on cheques, promissory notes and bills of exchange, a special and faster procedure applies. The debtor has ten days to pay and five days to object. The objection is made directly to the enforcement court, and unlike general proceedings, it does not automatically stop the proceedings unless the court orders a stay.
Enforcement With a Judgment
Where the creditor already holds a court judgment or an arbitral award, an enforcement order (icra emri) is sent to the debtor, who must comply within the period stated in the order, generally seven days. Foreign court judgments must first be recognised and enforced by a Turkish court through an exequatur (tenfiz) lawsuit before they can be enforced in Turkey.
Step by Step: How Enforcement Proceedings Work
- Enforcement request: The creditor files a request with the enforcement office stating the debtor, the amount, interest and the basis of the claim.
- Service of the payment order: The enforcement office serves the payment order on the debtor. The order also requires the debtor to declare their assets.
- Debtor’s response: Within seven days of service, the debtor may pay the debt or object to the proceedings.
- Attachment and collection: If the debtor neither pays nor objects, the proceedings become final and the creditor may request attachment (haciz) of bank accounts, receivables, a portion of the salary, vehicles and real estate. Attached assets can be sold at auction and the proceeds paid to the creditor.
How to Object to Enforcement Proceedings
In proceedings without a judgment, the debtor may object to the debt as a whole, to part of it, to the interest or to the signature on the underlying document. The objection is filed with the enforcement office within seven days of service of the payment order and does not need to state reasons, except for objections to the signature. A timely objection stops the proceedings.
Missing the seven-day period has serious consequences, as the proceedings become final and attachment can begin. For this reason, the date of service should be checked carefully, especially where the payment order was served electronically or at an old address.
What Can the Creditor Do After an Objection?
If the debtor objects, the creditor has two main routes to continue:
- Action for annulment of the objection (Article 67): The creditor may file a lawsuit before the general courts within one year of being notified of the objection. If the court finds the objection unjustified, it may also order the debtor to pay enforcement denial compensation of not less than 20 percent of the amount where the debt was determinable. For commercial receivables, mediation is mandatory before filing this lawsuit.
- Request for removal of the objection (Article 68): If the claim is based on certain qualified documents, such as a document with an acknowledged or notarised signature or an official document, the creditor may apply to the enforcement court within six months to have the objection removed through a faster procedure.
Where the debtor’s objection is found to be unjustified and made in bad faith, the debtor may also be ordered to pay compensation. Conversely, if the creditor’s claim turns out to be unfounded, the creditor may be held liable for compensation.
Debt Collection in Turkey for Foreign Creditors
Foreign individuals and companies can initiate enforcement proceedings in Turkey in the same way as Turkish creditors. A few points require attention:
- Power of attorney: A foreign creditor can appoint a Turkish lawyer through a power of attorney issued at a Turkish consulate, or notarised abroad and apostilled, together with a sworn Turkish translation.
- Security for costs: Under Article 48 of the Turkish Code on Private International and Procedural Law, foreign creditors may be required to provide security when initiating proceedings or lawsuits, unless an exemption applies under an international agreement or reciprocity.
- Foreign judgments and arbitral awards: These must be recognised and enforced by a Turkish court before enforcement proceedings can be based on them.
- Documents: Contracts, invoices and correspondence in a foreign language should be translated into Turkish for use before the enforcement court or in a lawsuit.
Points to Consider
- Keep the documents: Contracts, invoices, delivery notes and correspondence proving the debt should be kept carefully.
- Track the deadlines: Enforcement law deadlines are short; the seven-day objection period and the one-year period for the action for annulment of objection should not be missed.
- Check the debtor’s assets: The effectiveness of collection depends on the debtor’s assets, so an asset search through UYAP is an important early step.
Frequently Asked Questions
How long does debt collection take in Turkey?
If the debtor does not object, the proceedings become final within a short time after service of the payment order and attachment can begin. If the debtor objects, the duration depends on the lawsuit or the enforcement court proceedings that follow.
Do I need a court judgment to collect a debt in Turkey?
No. A creditor can start enforcement proceedings without a judgment. A court judgment is only needed if the debtor objects and the creditor files an action for annulment of the objection.
What happens if the debtor does not object within seven days?
The proceedings become final and the creditor may request attachment of the debtor’s assets, such as bank accounts, salary, vehicles and real estate.
Can a foreign company collect a debt from a Turkish company?
Yes. Foreign companies can initiate enforcement proceedings in Turkey through a Turkish lawyer. If the claim is based on a foreign judgment or arbitral award, it must first be recognised and enforced by a Turkish court.
Is mediation required before debt collection lawsuits?
For commercial receivables, mediation is mandatory before filing an action for annulment of objection. Starting enforcement proceedings at the enforcement office does not require mediation.
Yetkiner Law Firm provides legal support in İzmir in English, French and Turkish in enforcement proceedings, objections and related lawsuits for creditors and debtors. The firm can be reached through the channels on the contact page.
The information on this page has been prepared for general informational purposes and does not constitute legal advice. It is recommended to obtain legal support from a lawyer in specific cases.
