- info@vuraldemirlaw.com
- Mon - Fri 09:00 - 18:00
Debt Recovery & Enforcement in Turkey
Efficient Debt Collection Management in Turkey
Debt Collection and Enforcement in Turkey
I. Introduction
Turkey is one of the most significant trade partners for Dutch and European companies. However, while economic relations thrive, many European businesses face considerable challenges in collecting receivables. Long payment terms, complex legal regulations, and bureaucratic hurdles make debt collection in Turkey a complicated matter.
This is where Vural & Demir Law and Consulting comes into play!
Our law firm specializes in debt collection in Turkey, cross-border enforcement, and receivables recovery for international companies. With in-depth expertise in Turkish enforcement and insolvency law, we provide creditors with effective and legally compliant solutions to recover their outstanding debts efficiently.
II. Legal Framework for Debt Collection in Turkey
1. Lack of Legal Regulation for Debt Collection Agencies
Currently, there is no legal regulation governing debt collection agencies in Turkey. Therefore, specialized law firms with nationwide expertise take on the professional enforcement of outstanding claims.
III. Enforcing Claims in Turkey
1. Extrajudicial Payment Demand Under Turkish Law – Effective Dunning Strategies for Creditors
A notarial demand is a well-established method in Turkey to officially place a debtor in default when the due date is unspecified. It serves as the final extrajudicial request before initiating legal action, although it is not a mandatory prerequisite for filing a lawsuit.
One key advantage of a notarial demand is that it legally documents both the receipt and the exact content of the payment request. This allows the creditor to prove in case of dispute that the debtor was duly informed about the outstanding debt. These measures enable creditors to enforce their claims effectively and achieve fast settlement of outstanding receivables.
2. Payment Order Procedure Under Turkish Law
In Turkey, creditors may need to initiate court proceedings to assert their claims. However, an alternative preliminary collection method is the "Payment Order" process, regulated under Article 42 of the Turkish Enforcement and Bankruptcy Law. This is a single-step preliminary enforcement procedure that allows the creditor to formally notify the debtor to make the payment. Creditors can initiate the procedure through enforcement offices. Once the payment order is served to the debtor, they have seven days to file an objection or appeal.
If the debtor objects, the enforcement process is temporarily halted. This means that the creditor must initiate an annulment of objection lawsuit to proceed with enforcement. If the debtor’s objection is found to be unjustified, they may be ordered to pay up to 40% of the claim as strict liability compensation. However, creditors also face risks—if their claim is deemed invalid, they may be liable for legal costs.
3. Protective Measures in Turkish Enforcement Law – Protection Against Asset Transfers
Once enforcement proceedings begin, there is a risk that debtors may deliberately dispose of or transfer assets to avoid payment. This often includes selling real estate, emptying bank accounts, or transferring valuable assets before creditors can enforce their claims.
To prevent this, Turkish law allows creditors to apply for a preliminary attachment as a precautionary measure.
However, such an attachment can only be requested if the claim is due and payable and is not already secured by an existing pledge. Additionally, the application must be based on legal proof, such as a check, promissory note, or bond documenting the debt.
The preliminary attachment is filed with the competent civil or commercial court and is assessed based on documentary evidence— in general no oral hearing is required. To obtain approval, the creditor must provide security of up to 15% of the claim amount, either as a cash deposit or a bank guarantee.
This deposit ensures that the debtor is not unfairly disadvantaged in case of an unjustified attachment. If the measure is later deemed unjustified, the debtor can claim compensation for damages incurred. Once the enforcement procedure is successfully completed, the creditor can reclaim the deposited security by applying to the court.
By taking preliminary measures, creditors can protect their receivables and prevent debtors from concealing assets before enforcement actions take effect.
IV. Recognition and Enforcement of Foreign Judgments in Turkey – What Creditors Need to Know
1. Recognition of Foreign Judgments
a. Declaration of Enforceability
Judgments and arbitral awards issued in foreign countries cannot be enforced directly in Turkey. Before initiating enforcement proceedings, a recognition procedure ("Tanıma Tenfiz Davası") before Turkish courts is required.
For a foreign judgment to be recognized in Turkey, specific conditions must be met, including compliance with the principle of reciprocity—meaning the judgment must not interfere with the exclusive jurisdiction of Turkish courts or violate Turkish public order ("Ordre Public").
Recognition proceedings are generally conducted at the debtor’s place of residence in Turkey. If the debtor does not reside in Turkey, the case can be filed in Istanbul, Ankara, or Izmir. Recognizable judgments include final judgments, default judgments, cost decisions, and arbitral awards.
A critical aspect is that foreign enforcement orders cannot be directly executed or recognized in Turkey. Instead, a full court proceeding is required, with the enforcement order serving as evidence.
In practice, the recognition process can take 6 to 12 months, significantly delaying debt recovery. Therefore, it is advisable to pursue claims directly through a Turkish legal service provider, bypassing the time-consuming and costly recognition process, and proceeding directly to enforcement.
b. Enforcement of Foreign Judgments and Arbitral Awards in Turkey
Enforcement in Turkey is only possible after a foreign judgment or arbitral award has been recognized and declared enforceable by a Turkish court. After this step, the ruling can be enforced just like a Turkish court decision.
Seizable assets include, in particular, real estate, the seizure of which is registered with the land registry office. Through a corresponding entry in the land register, the creditor obtains a legal position similar to that of an assignment of claims.
In addition, business shares in corporations, bank deposits, as well as wages and salaries up to a legally defined limit can also be seized.
The enforcement process ends once the claim is fully settled—either through the debtor’s voluntary payment or by liquidating the seized assets. This is done through either a sale or a forced auction of the assets.
V. Efficient Debt Collection and Enforcement in Turkey – Our Services
Vural & Demir Law and Consulting provides comprehensive solutions for businesses and individuals seeking to recover outstanding debts in Turkey. Our firm specializes in debt collection, receivables enforcement, and legal execution, ensuring that clients protect their financial interests efficiently and lawfully.
Our Core Expertise in Debt Recovery:
🔹 Debtor Asset Investigation & Creditworthiness Assessment
Before legal action is initiated, we analyze the financial situation of the debtor and examine the available assets. This enables a targeted enforcement of claims by selecting the most economically viable strategy.
🔹 Judicial & Extrajudicial Debt Enforcement
We support our clients in both extrajudicial dunning procedures and judicial enforcement proceedings under Turkish law. This includes drafting legally compliant payment demands as well as initiating enforcement actions against debtors who fail to meet their payment obligations.
🔹 Asset Protection Measures
To prevent debtors from illegally transferring or concealing their assets, we initiate court-ordered security measures. These include injunctions, account freezes, and the seizure of real estate or company shares.
🔹 International Debt Enforcement & Recognition of Foreign Judgments
International judgments and arbitral awards are not directly enforceable in Turkey. We handle the necessary recognition procedure (Tenfiz process) to make foreign court decisions legally binding and successfully enforce them.
🔹 Strategic Debt Collection & Enforcement Actions
Our law firm is committed to protecting our clients' rights and ensures fast and efficient debt recovery. We carry out seizures, auctions, and enforcement measures in a targeted manner to successfully recover claims in Turkey.
🔹 Mediation & Settlement Negotiations
Not every case necessarily has to end up in court. In many instances, we can achieve an out-of-court solution through negotiations and mediation between creditors and debtors, which is both economically and strategically beneficial.
Debt Collection and Enforcement in Turkey
I. Introduction
Turkey is one of the most significant trade partners for Dutch and European companies. However, while economic relations thrive, many European businesses face considerable challenges in collecting receivables. Long payment terms, complex legal regulations, and bureaucratic hurdles make debt collection in Turkey a complicated matter.
This is where Vural & Demir Law and Consulting comes into play!
Our law firm specializes in debt collection in Turkey, cross-border enforcement, and receivables recovery for international companies. With in-depth expertise in Turkish enforcement and insolvency law, we provide creditors with effective and legally compliant solutions to recover their outstanding debts efficiently.
II. Legal Framework for Debt Collection in Turkey
1. Lack of Legal Regulation for Debt Collection Agencies
Currently, there is no legal regulation governing debt collection agencies in Turkey. Therefore, specialized law firms with nationwide expertise take on the professional enforcement of outstanding claims.
III. Enforcing Claims in Turkey
1. Extrajudicial Payment Demand Under Turkish Law – Effective Dunning Strategies for Creditors
A notarial demand is a well-established method in Turkey to officially place a debtor in default when the due date is unspecified. It serves as the final extrajudicial request before initiating legal action, although it is not a mandatory prerequisite for filing a lawsuit.
One key advantage of a notarial demand is that it legally documents both the receipt and the exact content of the payment request. This allows the creditor to prove in case of dispute that the debtor was duly informed about the outstanding debt. These measures enable creditors to enforce their claims effectively and achieve fast settlement of outstanding receivables.
2. Payment Order Procedure Under Turkish Law
In Turkey, creditors may need to initiate court proceedings to assert their claims. However, an alternative preliminary collection method is the "Payment Order" process, regulated under Article 42 of the Turkish Enforcement and Bankruptcy Law. This is a single-step preliminary enforcement procedure that allows the creditor to formally notify the debtor to make the payment. Creditors can initiate the procedure through enforcement offices. Once the payment order is served to the debtor, they have seven days to file an objection or appeal.
If the debtor objects, the enforcement process is temporarily halted. This means that the creditor must initiate an annulment of objection lawsuit to proceed with enforcement. If the debtor’s objection is found to be unjustified, they may be ordered to pay up to 40% of the claim as strict liability compensation. However, creditors also face risks—if their claim is deemed invalid, they may be liable for legal costs.
3. Protective Measures in Turkish Enforcement Law – Protection Against Asset Transfers
Once enforcement proceedings begin, there is a risk that debtors may deliberately dispose of or transfer assets to avoid payment. This often includes selling real estate, emptying bank accounts, or transferring valuable assets before creditors can enforce their claims.
To prevent this, Turkish law allows creditors to apply for a preliminary attachment as a precautionary measure.
However, such an attachment can only be requested if the claim is due and payable and is not already secured by an existing pledge. Additionally, the application must be based on legal proof, such as a check, promissory note, or bond documenting the debt.
The preliminary attachment is filed with the competent civil or commercial court and is assessed based on documentary evidence— in general no oral hearing is required. To obtain approval, the creditor must provide security of up to 15% of the claim amount, either as a cash deposit or a bank guarantee.
This deposit ensures that the debtor is not unfairly disadvantaged in case of an unjustified attachment. If the measure is later deemed unjustified, the debtor can claim compensation for damages incurred. Once the enforcement procedure is successfully completed, the creditor can reclaim the deposited security by applying to the court.
By taking preliminary measures, creditors can protect their receivables and prevent debtors from concealing assets before enforcement actions take effect.
IV. Recognition and Enforcement of Foreign Judgments in Turkey – What Creditors Need to Know
1. Recognition of Foreign Judgments
a. Declaration of Enforceability
Judgments and arbitral awards issued in foreign countries cannot be enforced directly in Turkey. Before initiating enforcement proceedings, a recognition procedure ("Tanıma Tenfiz Davası") before Turkish courts is required.
For a foreign judgment to be recognized in Turkey, specific conditions must be met, including compliance with the principle of reciprocity—meaning the judgment must not interfere with the exclusive jurisdiction of Turkish courts or violate Turkish public order ("Ordre Public").
Recognition proceedings are generally conducted at the debtor’s place of residence in Turkey. If the debtor does not reside in Turkey, the case can be filed in Istanbul, Ankara, or Izmir. Recognizable judgments include final judgments, default judgments, cost decisions, and arbitral awards.
A critical aspect is that foreign enforcement orders cannot be directly executed or recognized in Turkey. Instead, a full court proceeding is required, with the enforcement order serving as evidence.
In practice, the recognition process can take 6 to 12 months, significantly delaying debt recovery. Therefore, it is advisable to pursue claims directly through a Turkish legal service provider, bypassing the time-consuming and costly recognition process, and proceeding directly to enforcement.
b. Enforcement of Foreign Judgments and Arbitral Awards in Turkey
Enforcement in Turkey is only possible after a foreign judgment or arbitral award has been recognized and declared enforceable by a Turkish court. After this step, the ruling can be enforced just like a Turkish court decision.
Seizable assets include, in particular, real estate, the seizure of which is registered with the land registry office. Through a corresponding entry in the land register, the creditor obtains a legal position similar to that of an assignment of claims.
In addition, business shares in corporations, bank deposits, as well as wages and salaries up to a legally defined limit can also be seized.
The enforcement process ends once the claim is fully settled—either through the debtor’s voluntary payment or by liquidating the seized assets. This is done through either a sale or a forced auction of the assets.
V. Efficient Debt Collection and Enforcement in Turkey – Our Services
Vural & Demir Law and Consulting provides comprehensive solutions for businesses and individuals seeking to recover outstanding debts in Turkey. Our firm specializes in debt collection, receivables enforcement, and legal execution, ensuring that clients protect their financial interests efficiently and lawfully.
Our Core Expertise in Debt Recovery:
🔹 Debtor Asset Investigation & Creditworthiness Assessment
Before legal action is initiated, we analyze the financial situation of the debtor and examine the available assets. This enables a targeted enforcement of claims by selecting the most economically viable strategy.
🔹 Judicial & Extrajudicial Debt Enforcement
We support our clients in both extrajudicial dunning procedures and judicial enforcement proceedings under Turkish law. This includes drafting legally compliant payment demands as well as initiating enforcement actions against debtors who fail to meet their payment obligations.
🔹 Asset Protection Measures
To prevent debtors from illegally transferring or concealing their assets, we initiate court-ordered security measures. These include injunctions, account freezes, and the seizure of real estate or company shares.
🔹 International Debt Enforcement & Recognition of Foreign Judgments
International judgments and arbitral awards are not directly enforceable in Turkey. We handle the necessary recognition procedure (Tenfiz process) to make foreign court decisions legally binding and successfully enforce them.
🔹 Strategic Debt Collection & Enforcement Actions
Our law firm is committed to protecting our clients' rights and ensures fast and efficient debt recovery. We carry out seizures, auctions, and enforcement measures in a targeted manner to successfully recover claims in Turkey.
🔹 Mediation & Settlement Negotiations
Not every case necessarily has to end up in court. In many instances, we can achieve an out-of-court solution through negotiations and mediation between creditors and debtors, which is both economically and strategically beneficial.
- info@vuraldemirlaw.com
- Mon - Fri 09:00 - 18:00