Debt collection is the process of recovering unpaid debts from individuals or businesses. In Turkey, debt collection is governed by clear legal procedures to protect both creditors and debtors. Whether you’re a business trying to collect unpaid invoices or an individual owed money, understanding the steps can help you resolve the issue efficiently.
How Does Debt Collection Work in Turkey?
Debt collection in Turkey typically follows these stages:
1. Amicable Collection (Negotiation Stage)
Before starting legal proceedings, it’s common to try to resolve the issue through negotiation.
What Happens:
Creditors contact the debtor to request payment.
Payment plans or partial settlements may be negotiated.
Why It’s Important:
Saves time and money compared to court proceedings.
Preserves the business relationship if handled professionally.
2. Legal Debt Collection (Enforcement Stage)
If negotiation fails, creditors can take legal action through Turkey’s enforcement system.
How It Works:
The creditor files an application with the Enforcement Office (İcra Müdürlüğü).
The Enforcement Office sends a payment order to the debtor.
The debtor has seven days to object or make payment.
If the Debtor Objects:The process moves to court, where the creditor must prove the validity of the debt.
If the Debtor Does Not Respond:The Enforcement Office can proceed with actions such as:
Seizing assets.
Garnishing wages.
3. Court Proceedings (If Needed)
If there’s a dispute over the debt, the case is taken to court.
What Happens in Court:
The creditor presents evidence to prove the debt (e.g., contracts, invoices).
The court decides whether the debt is valid and how it should be repaid.
Time Frame:Court cases can take several months or longer, depending on complexity.
Types of Debts That Can Be Collected
Unpaid Invoices or Bills:
Common in business-to-business (B2B) transactions.
Loan Repayments:
For unpaid personal or business loans.
Rent Arrears:
For landlords seeking unpaid rent from tenants.
Compensation Claims:
For court-ordered payments that haven’t been made.
Key Legal Tools for Debt Collection in Turkey
1. Enforcement Office Applications
The Enforcement Office handles most debt collection actions, including sending payment orders and seizing assets.
2. Precautionary Measures
Creditors can request the court to freeze a debtor’s assets to prevent them from being sold or hidden during the case.
3. Mediation
In some cases, mediation may be required before starting court proceedings. This involves a neutral third party helping both sides reach an agreement.
Debt Collection for Foreign Creditors
Foreign creditors can also collect debts in Turkey, but the process involves some additional steps:
Recognition and Enforcement of Foreign Judgments:
If the debt was confirmed by a foreign court, the decision must be recognized by a Turkish court before enforcement.
Local Representation:
Foreign creditors must work with a Turkish lawyer or representative to navigate the legal system.
Currency Conversion:
If the debt is in a foreign currency, the court may convert it to Turkish Lira based on current exchange rates.
Time Limits for Debt Collection
Turkish law sets time limits for debt collection, known as the statute of limitations:
Commercial Debts: Typically 5 years from the date the payment was due.
Rent Payments: 5 years from the due date.
Loans or Court Judgments: 10 years, unless otherwise stated in the contract.
If the time limit expires, the debt may no longer be enforceable.
Costs of Debt Collection in Turkey
Debt collection involves some costs, which may include:
Enforcement Office Fees: Charged for filing an enforcement application.
Court Fees: If the case goes to court, these fees depend on the value of the debt.
Lawyer Fees: Negotiated between the creditor and their lawyer.
In most cases, these costs can be recovered from the debtor if the claim is successful.
Why Work with a Debt Collection Lawyer?
Debt collection laws and procedures in Turkey can be complex, especially if the debtor disputes the claim. A lawyer can:
Handle Legal Formalities: Ensure all paperwork is accurate and deadlines are met.
Negotiate on Your Behalf: Help reach a settlement before court action is necessary.
Represent You in Court: If the case proceeds to litigation, they’ll defend your rights and present your evidence.
Final Thoughts
Debt collection in Turkey follows a structured process, starting with negotiation and moving to legal enforcement if necessary. Understanding your rights and the steps involved can make the process smoother and increase your chances of recovering what you’re owed.
If you need help collecting a debt, working with an experienced lawyer ensures you follow the correct procedures and protect your interests. Whether you’re a business owner or an individual, professional advice can make a big difference in the outcome.
