Fast and effective debt collection in Turkey

Are you or your firm feeling the need to recover some of your outstanding debt? Are poor or dishonest debt repayment practices putting your company’s cash flow in danger? Our specialist debt collection lawyers are here to help you find the right solution. We will use ethical and respectful measures to recover your debt, in a way that protects your interests and remains attainable for your debtors. We will actively manage all of your payment contracts and maintain our impressive success rate. We will do the heavy lifting, allowing you to spend your time focusing on the more important side of your business.

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Fast and effective debt collection in Turkey

Given the current financial climate you may wonder what options are open to you or your organisation when you are owed money by a third party. There can often be an assumption that lengthy court processes are required to recover sums due. That is not the case and in this article we consider some of the options available to help recover debts in Turkey.

Turkey is frequently involved in matters involving international debt collection. The debt recovery process necessarily involves in-depth fact-finding and additional concerns depending on the relevant parties’ attachment to Turkey.

If a creditor who does not live in Turkey has a claim for payment under a purchase contract, service contract, contract for work and services or for any other debt and the debtor who lives in Turkey fails to pay, the creditor is faced by the question of how he can still enforce his claim and recover his money.

A foreign creditor is entitled to file a lawsuit or initiate direct enforcement  proceedings under Turkish laws against a debtor located in Turkey. Nevertheless, unless there is a reciprocal agreement between Turkey and the creditor’s country or the foreign creditor has no assets in Turkey (i.e. real estate), pursuant to the Turkish Conflict of Laws Rules, a foreign creditor may have to provide a security to the court to guarantee the court expenses and damages which may arise in case the creditor fails to prove its case. The amount of such security is determined by the court, usually as a certain percentage of the amount claimed in the lawsuit.  

The Competent Authorities

The recovery of money debt and collateral security in the form of money in Turkey is governed by the Act on Debt Enforcement and Bankruptcy and is basically orchestrated by three actors that may interact with each other throughout two main proceedings. The three actors are the Debt Collection Office (DCO), the Bankruptcy Office (BO) and the Civil Courts.

Three ways of proceedings

The two main proceedings are referred to as the direct enforcement proceedings (icra takibi), mediation and the court proceedings before a judge

The direct enforcement proceedings (icra takibi) is conducted by the Debt Collection Office (icra dairesi). It is, unlike a lawsuit, a simple, fast and inexpensive way to enforce a payment claim.

It is simpler because it is largely conducted with the help of forms in which the claimant only has to enter a few data such as the amount of the claim, the name and address of the respondent as well as the grounds of the claim. As the Debt Collection Office does not verify whether the alleged claim actually exists in summary proceedings for a payment order and there are no hearings or taking of evidence, the procedure is much faster. Finally, the Debt Collection Office fees are lower than in a normal court lawsuit. 

Step 1: The direct enforcement proceedings – How and Where to Start

As part of the direct enforcement proceedings the creditor should file a debt collection request with the DCO at the place of the debtor, or in some cases at the place of his asset(s). This request does not require any judicial proof of the validity of a claim. The DCO will issue a payment order on the debtor. Once issued, a payment order will be valid for one year. Interesting fact is that the Turkish DCOs issue around 30 million payment orders each year.

Upon being issued a payment order, the debtor may or may not object the creditor’s claim with a verbal or written objection lodged with the DCO. If the debtor does not object the claim within 7 days, the creditor may request the DCO to continue proceedings. The fact that the debtor has not made a legal objection is noted under a special heading in the order for payment. In such an event, the enforceability of the claimed debt is neither verified by a court nor any official body, except if the debtor files action to the civil court for annulment of the payment order. 

The DCO follows a standard process that begins when one party submits a Debt Collection Request (icra takibi ) to the DCO. If the claim is not contested or if the debtor’s objection is dismissed by a judge, the DCO may then attempt to recover the debt. As it is easy to initiate debt collection proceedings, it is advised that recipients of a Debt Collection Request do not accept it unless they are genuinely in debt to the relevant creditor.

Summary of the Process

The exact process of debt recovery will depend on the nature of the debt, whether it is contested and how it can be recovered. If the debt is contested, the process will include legal action. An outline of the procedure is below:

  • The creditor submits a Debt Collection Request form to the DCO in the debtor’s place of residence. The fee for this service depends on the size of the debt
  • The DCO issues the debtor with a Demand for Payment (ödeme emri)
  • If the debtor wishes to contest the Demand for Payment, they can send an Objection Notice (itiraz) to the DCO within seven days of receiving it. If the creditor obtains a court order, the Objection Notice will be dismissed.
  • If the debtor does not contest the Demand for Payment within seven days, they have technically agreed to pay the debt along with the DCO’s administration fee. If they cannot pay the debt, the creditor may submit a Request for Continuation to the DCO, and the DCO will begin the process to collect the debt

How to Set Aside an Objection

The debtor’s objection to the payment order will bring the debt collection proceedings to a halt. It means that the creditor’s claim has been put into question and that civil court proceedings will be required to set aside such objection. To continue with the direct enforcement proceedings, the creditor will have to procure a court order with a so called definitive or provisional dismissal of the legal objection. 

The Ensuing Enforcement Proceedings

Generally, there are three main types of enforcement proceedings which depend on the nature of the debt and on the legal status of the debtor, i.e. private individual or legal entity. These three proceedings are briefly summarized as follows:


If the debtor is an entity registered to the commercial register, then the procedure will be continued by way of bankruptcy. Once bankruptcy has been declared by the competent court on a creditor’s request, all creditors always converge and participate in the collective enforcement procedure. The debtor is therefore also referred to as a joint debtor. Bankruptcy means the complete liquidation of the debtor’s assets and liabilities. In general, the principle of equal treatment applies, but privileged claims exist. Bankruptcy gives creditors a public-law right to conduct the proceedings and be satisfied from the proceeds; however, the debtor remains the legal owner of its assets until they are realised.

Debt Collection by Realising Pledged Property

If a debt is secured by a pledge or a mortgage, the pledged property is seized and sold at auction by the DCO. If the proceeds of the liquidation do not cover the secured debt as well as the cost of the proceedings, the creditor is provided with a certificate of unpaid debts allowing the creditor to re-initiate execution proceedings at a later time.

Debt Collection by Seizure of Assets

If a debt is not secured, and the debtor is not a registered commercial entity but a private individual, his assets can be seized and sold at auction. The DCO will make an inventory of all assets of the debtor such as cash, valuables, real estate and future salary payments and seize them, subject to the protection of the existential minimum to make a decent living (debtor protection). 

Obligation to declare property

The debtor is obliged to declare his/her property even if s/he does not acquire any money/asset at the time of an execution file pending against him or herself. 

The Turkish Enforcement and Bankruptcy Law Article 337 states that the debtor shall be penalized with ten days of imprisonment upon request of the claimant if s/he is not present at the debt enforcement office for the declaration of property without a valid reason or does not submit a written excuse declaration in his/her absence. When confiscated assets are enough to compensate the debt or the debt is paid, aforementioned penalty gets annulled. 

Step 2: Mandatory mediation

In order to try to reach an agreement between the parties before the case goes to court, there are specific requirements for mandatory mediation step under Turkish law.

The parties meet at the mediation meeting and try to reach an agreement with each other. The parties may be represented by their lawyers at the mediation meetings.

If the parties agree in the negotiations, the agreement signed by parties and a mediator becomes as binding as a judicial decision. If the parties cannot agree, the creditor can take the case to court. 

Step 3: Court proceedings

The next step is to take the Turkish debt collection matter to court. There are then essentially two different court procedures available to the creditor depending of the amount of the debt.

A foreign creditor may as well directly file a lawsuit against the debtor in order to collect the debt without seeking any provisional attachment or initiating an enforcement proceeding. As stated above, in such case, a foreign creditor may be required to deposit a security to the court until the end of the lawsuit to guarantee the payment of court expenses or defendant’s (debtor’s) possible damages if the plaintiff (creditor) fails to prove his case. The place and court where the lawsuit is filed in determined pursuant to Turkish Civil Procedural Law, which in most cases is the defendant’s place of residency. Competent court (i.e. Commercial Court or Civil Court of General Jurisdiction) is decided based on the nature of the case.

When filing the lawsuit, the plaintiff is required the deposit the court expenses such as service, court expert, viewing and witness expenses, in advance. Moreover, a court charge which will be calculated based on the amount of the claim must also be paid at the time of filing. In general, courts render a decision within two (2) years of the filing whereas finalization of the decision may take up to four (4) or more years as in some cases, the plaintiff and the defendant are entitled to both apply to court of appeals and court of cassation respectively.

When a judgement is rendered by the court, the creditor may initiate an execution proceeding based on the decision where the debtor will have no right to object. Therefore, except some cases, it is possible to initiate an enforcement proceeding based on a judgement, without waiting the finalization of it. However, if such judgement is not finalized, the debtor is entitled to seek a decision for stay of execution until the finalization from the court of appeals or the court of cassation. In such case, the debtor will be required to deposit the whole amount granted in the judgement to the enforcement office which will be directly paid to the creditor if the judgement of the court is approved by the court of appeals or the court of cassation and finalized.  

Enforcement of a claim in Turkey

In short, enforcement of a claim involves using the authorities to compulsorily transfer property from a debtor to a creditor.

Enforcement of monetary claims is governed by the DCBA. (The Debt Collection and Bankruptcy Act.) The Act regulates a procedure whereby a creditor’s claim is satisfied by realising a debtor’s assets and transferring them to the creditor, or alternatively by bankrupting the debtor and realising all the debtor’s assets for distribution to creditors.

The procedure is initiated by a creditor formally submitting an application for enforcement to the debt enforcement authorities. Usually at the place where the debtor has its registered office.

The debtor is notified of the application and is given several days to pay the claim or to contest the claim within seven days. If neither of these is done, the authority proceeds with the enforcement of the claim.

If the creditor has an enforcement order (such as a judgment from court proceedings), the creditor can ask the authorities to disregard the contestation of the claim. This is done by the creditor in the summary procedure in court. 

Injunctive Relief and Provisional Attachment

Pursuant to the Turkish Civil Procedural Law and Bankruptcy and Enforcement Law, a foreign creditor, indifferently from local plaintiffs, is entitled to seek injunctive relief or provisional attachment as well.

Injunctive relief

Injunctive relief may be sought in cases where the subject of the case or the claim is related to a movable or immovable property. Therefore, for monetary claims, the courts do not grant an injunctive relief for the creditors as in such cases, the creditors must seek provisional attachment. Injunctive relief may be sought along with the filing of main lawsuit as well as separately, prior to the filing of the main lawsuit. Turkish Civil Procedural Law provides that a court may grant an injunctive relief in case i) the plaintiff can show that it is likely that the main lawsuit will be decided in his favor and ii) unless an injunctive relief is granted, it is likely that the plaintiff will incur irrecoverable damages. The court may as well, require the plaintiff to deposit a certain amount of security to guarantee the payment of defendant’s possible damages in case the main lawsuit is decided in defendant’s favor. In case an injunctive relief is sought separately, prior to the filing of the main lawsuit, the plaintiff is required to file the main lawsuit within ten (10) days from the grant of the injunctive relief.

Provisional Attachment

Unlike injunctive relief, a creditor may seek provisional attachment for monetary claims (unless it is secured by a lien-with limited exceptions) prior to the initiation of enforcement proceedings in order to prevent the debtor from transferring his assets to third persons. Provisional attachment may be sought for both due and payable debts and for the debts that are not yet due. However, for the debt which are not yet due, the creditor must prove that i) the debtor does not have specific residency or ii) it is likely that the debtor will transfer his assets to avoid paying the debt or to obstruct the enforcement of payment. In practice, the courts are likely to grant a provisional attachment in case the creditor can present the court a bill of exchange. Like the injunctive relief, the court will require the creditor to deposit a security in order to ensure the payment of debtor’s possible damages that may arise due to the provisional attachment. In practice, the amount of the security is often decided as the fifteen (15%) percent of the amount claimed. In case a provisional attachment is granted by the court, the creditor, through enforcement offices, may start a preliminary enforcement proceeding and attach the property (movable or immovable) of the debtor without any prior notice.   

How much does it cost to recover a debt?

The creditor is obliged to advance the costs of enforcement, which are requested from time to time by the debt enforcement office and which are proportionate to the value of the claim. The creditor must also advance the costs of the rejection procedure. If the rejection judge accepts the application, the court will then charge the debtor with all the enforcement and court costs advanced by the creditor.

If the plaintiff is a foreigner, either a legal entity or a real person, then in addition to the court fees to be incurred, the plaintiff shall also post security pursuant to Article 48 of Turkish Law Numbered 5718 on International Private Law. The plaintiff needs to check and see whether there exists any reciprocity or agreement on judicial cooperation in civil matters between the Republic of Turkey and the country of origin of the plaintiff that foregoes the necessity of posting security on a reciprocal basis. Otherwise, the amount to be calculated by the court based on surrounding circumstances shall be deposited in advance along with court fees to file the lawsuit. 

Assistance of lawyers

Enforcement proceedings present numerous pitfalls, especially if the debtor is a person who knows the law, as is generally the case with companies or those that are instructed by lawyers. The assistance of a lawyer is therefore strongly recommended.

Lawyers’ fees in Turkey are generally regulated according to an hourly rate system, ranging from a minimum of 100 USD per hour to a maximum of 500 USD per hour, or even more if the claim is particularly large. The lawyer and the client may also agree on a flat fee and also on a percentage fee: in the latter case, there is always a minimum fixed amount to which the percentage is added and which, as a rule, decreases as the claim increases.

For further information we are at your disposal. We are happy to help you with debt collection in Turkey. We have the local expertise to help you quickly and efficiently!


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