Debt Collection and Recovery in Turkey

Account receivable collection in Turkey
debt collection proceedings

Dear visitors of our site! We are starting a series of articles dedicated to business and trade in Turkey and of course one of the most important topics to be discussed first is account receivable collection. In this article we will discuss the ways foreign enterprises and individuals can perform debt collection in Turkey.

When making business with Turkish enterprises one of the most important issue is to make up the contract according to the peculiarities of Turkish legal system.

 

Debt collection proceedings are regulated by the Law on execution and bankruptcy, and the executory process is carried out by the Bailiff Service, located in every province and city of Turkey. In some larger towns can act several services bailiffs, eg in Ankara there are 32 such department. There can be several departments of Bailiff Service in big busy cities. For example in Ankara there are 32 Bailiff offices. Account receivable collection, as well as the activity of bailiff service departments is regulated by such judicial authority Icra Mahkemesi (*Turkish language).

Enforcement proceedings and bankruptcy are very large areas of the Turkish legislation, in order develop the right strategy and achieve good results it is very important to consult with qualified lawyers in Turkey. Seyhan Law office has extensive experience in the field of debt collection and has provided legal services for many foreign companies facing such problems in Turkey.

There are three ways to implement debt collection from the debtor:

1) Initiation of enforcement proceedings on the basis of bank checks and money orders.

If the creditor has the bank checks or money orders which determine the amount of the debt and the payment terms are not specified, it is possible to collect the debt on the basis of these documents. In this case, the bailiff service prepares an order of peremptory payment, which obliges the debtor to pay the necessary sum within 10 days.

If the debtor has any objections and does not admit the debt or recognise the signature it is necessary to file a lawsuit (Icra Mahkemesi) within 5 days from the day the debtor receives this order.

The court may decide on the termination of the enforcement proceedings, but if the decision is not issued, the executive procedure continues, as a result such assets such as real estate, vehicles, bank accounts may be seized.

2) Initiation of enforcement proceedings on the basis of the contract or invoice.

If the creditor intends to recover the debt on the basis of these documents, the bailiff service, as in the previous case, prepares order of payment and forwards it to the debtor.

If the debtor has not denied the presence of debt within 7 days since receiving the order of peremptory payment, then the bailiff department has the right to start enforcement proceedings and confiscate the assets of the debtor.

However, if during these 7 days, the debtor denies the debt, the enforcement procedure will be suspended and the bailiffs will not be able seize the property of the debtor. Enforcement proceedings can be restarted only if the court issues an appropriate decision.

3) Initiation of enforcement proceedings on the basis of a court decision.

The creditor can apply to the bailiff office if he has such legal document as a court order. The bailiff service will issue an order of payment wich states that the debtor must pay the necessary sum of money within 7 days since receiving the notification.

If payment was not made within the prescribed period, the debtor's property may be seized. Such payments as alimony and compensations can be collected this way on the basis of a court decision.

If you need any additional information on debt collection proceedings you can directly contact out lawyers in Turkey.