{"id":25135,"date":"2023-04-26T19:34:06","date_gmt":"2023-04-26T16:34:06","guid":{"rendered":"https:\/\/www.bicakhukuk.com\/?p=25135"},"modified":"2023-04-26T20:07:54","modified_gmt":"2023-04-26T17:07:54","slug":"fast-and-effective-debt-collection-in-turkey","status":"publish","type":"post","link":"https:\/\/www.bicakhukuk.com\/en\/fast-and-effective-debt-collection-in-turkey\/","title":{"rendered":"Fast and effective debt collection in Turkey"},"content":{"rendered":"

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.<\/span><\/p>\n

Turkey is frequently involved in matters involving international debt collection<\/a>. The debt recovery process necessarily involves in-depth fact-finding and additional concerns depending on the relevant parties\u2019 attachment to Turkey.<\/span><\/p>\n

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.<\/span><\/p>\n

A foreign creditor is entitled to file a lawsuit or initiate direct enforcement \u00a0proceedings under Turkish laws against a debtor located in Turkey. Nevertheless, unless there is a reciprocal agreement between Turkey and the creditor\u2019s 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. <\/span>\u00a0<\/span><\/p>\n

The Competent Authorities<\/span><\/h3>\n

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. <\/span><\/p>\n

Three ways of proceedings<\/span><\/h3>\n

The two main proceedings are referred to as the direct enforcement proceedings (icra takibi), mediation and the court proceedings before a judge<\/span><\/p>\n

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. <\/span><\/p>\n

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.<\/span>\u00a0<\/span><\/p>\n

Step 1: The direct enforcement proceedings – How and Where to Start<\/span><\/h3>\n

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.
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Upon being issued a payment order, the debtor may or may not object the creditor\u2019s 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.<\/span>\u00a0<\/span><\/p>\n

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\u2019s 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.<\/span><\/p>\n

Summary of the Process<\/span><\/h3>\n

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:<\/span><\/p>\n