Are you facing challenges trying to recover debt in Turkey from a debtor located there? For foreign companies and individuals, navigating the process of debt collection in Turkey can seem daunting due to distance, language barriers, and unfamiliarity with the local legal system. However, Turkish law provides effective mechanisms for creditors to pursue their claims. This guide offers a practical roadmap for foreign creditors, explaining the strategic steps involved—from initial amicable negotiations to formal legal enforcement proceedings—to successfully recover your receivables.
Debt Collection in Turkey has been a matter of critical legal areas applicable in Turkey. Individuals and corporations should be aware of the timelines and deadlines, stipulated by law.
The Strategic First Step: Amicable Collection
Before initiating costly and time-consuming legal action, the most prudent and often most effective first step is to attempt an amicable collection. This pre-legal phase focuses on communication and negotiation to persuade the debtor to pay voluntarily.
Why Prioritize Amicable Collection?
- Speed & Cost-Effectiveness: It is significantly faster and less expensive than court proceedings or enforcement actions. Legal fees and court costs in Turkey can be substantial, especially for international cases.
- Preserving Business Relationships: If you wish to potentially continue doing business with the debtor in the future, a negotiated settlement is far less damaging to the relationship than a lawsuit.
- Assessing the Debtor’s Intent: This phase helps gauge the debtor’s willingness and ability to pay. Their response (or lack thereof) provides valuable information for planning the next legal steps, if necessary.
How We Manage Amicable Collection: As your legal representatives, our approach typically involves:
- Sending a Formal Demand Letter (İhtarname): A professionally drafted letter, often in both Turkish and English, clearly stating the debt, the legal basis for the claim, and a final deadline for payment before legal action commences. This formal communication signals your seriousness.
- Direct Negotiation: Engaging in direct communication (phone calls, emails) with the debtor to understand their position and negotiate a viable payment plan or settlement.
- Leveraging Local Presence: Having a lawyer in Turkey communicate on your behalf often carries more weight and urgency than attempts made from abroad.
Attempting an amicable resolution first is not only a practical strategy but often a prerequisite demonstration of good faith before escalating to formal legal proceedings.
Legal Debt Collection Process in Turkey: An Overview
When amicable attempts to recover debt in Turkey fail, the next step is to initiate formal legal proceedings. The primary legal framework governing debt collection in Turkey is the Turkish Enforcement and Bankruptcy Law (İcra ve İflas Kanunu – İİK, Law No. 2004). This comprehensive law provides creditors with powerful tools to enforce their claims against debtors.
Understanding the Turkish legal system offers two main pathways for pursuing a debt legally:
1. Execution Proceedings Without a Judgment (İlamsız İcra Takibi): This is the most common, fastest, and generally preferred method for collecting undisputed debts based on documents like invoices, contracts, or promissory notes. It allows the creditor to start the enforcement process directly through an Enforcement Office (İcra Dairesi) without needing a prior court decision confirming the debt. The process relies on the debtor not objecting to the payment order issued by the office.
2. Execution Proceedings Based on a Judgment (İlamlı İcra Takibi): This path is used when the debt is disputed, requires a court’s evaluation (e.g., calculating damages for breach of contract), or when the creditor already possesses a final court order (ilam) confirming the debt. It involves first obtaining a favorable judgment from a competent Turkish court (e.g., a Commercial Court) and then using that court order as the basis for initiating enforcement proceedings (haciz). This route is generally longer and more complex due to the initial court phase.
The choice between these two paths depends heavily on the nature of your claim and the evidence you possess. An experienced lawyer is crucial in determining the most effective strategy for your specific case as a foreign creditor.
Execution Without Judgment – The Fast Track for Undisputed Debts
This is the most frequently used method for debt collection in Turkey, especially when the debt is clearly documented (e.g., based on an invoice, contract, or check) and is not expected to be disputed by the debtor. It allows you to start the enforcement process quickly without needing a prior court verdict.
Here is the step-by-step process:
Step 1: Filing the Request at the Enforcement Office
Your lawyer initiates the process by filing an “execution request” (takip talebi) with the competent Enforcement Office. This request includes details of the creditor, the debtor, the amount of the debt, and the supporting documents.
Step 2: Issuance and Service of the Payment Order
Based on the request, the Enforcement Office issues a formal “Payment Order” (ödeme emri) and serves it to the debtor’s official address. This order legally demands that the debtor either pay the debt within seven (7) days or formally object to the debt within the same period.
Step 3: Debtor’s Response (or Lack Thereof)
The debtor now has three options within those 7 days:
- Pay the Debt: The debt is collected, and the process ends successfully.
- File an Objection : The debtor formally objects to the debt (either the amount or the existence of the debt itself) at the Enforcement Office. This immediately stops the execution proceedings.
- Do Nothing: If the debtor does not pay or object within 7 days, the debt becomes legally finalized (takip kesinleşir), and the creditor can move to the enforcement stage.
Step 4: Overcoming Objections (If Necessary)
If the debtor files an objection, you, as the creditor, must take further legal action to remove this objection and continue the process. This typically involves filing a lawsuit:
- Action for Annulment of the Objection : A full lawsuit filed at the competent court (usually Commercial Court) to prove the existence and validity of the debt.
- Action for Removal of the Objection : A faster, more limited lawsuit filed at the Enforcement Court (İcra Hukuk Mahkemesi), available only if your claim is based on specific strong evidence like a notarized document or an acknowledged signature.
Step 5: The Enforcement Stage
Once the debt is finalized (either because the debtor did not object or because their objection was legally removed by a court decision), the creditor can request the Enforcement Office to start seizure proceedings (haciz). This involves identifying and seizing the debtor’s assets (such as bank accounts, real estate, vehicles, or receivables from third parties) to satisfy the debt.
This Execution Without Judgmen process offers a potentially rapid way to recover debt in Turkey as a foreigner, but its success hinges on the debtor not raising a strong objection.
Execution Based on a Judgment – For Disputed Debts or Court Orders
This second pathway for debt collection in Turkey is used when the debt is disputed by the debtor, requires a judicial determination (for example, calculating damages in a breach of contract case), or when the creditor already possesses a final and binding court decision (ilam) confirming the debt.
Unlike the ilamsız takip, this process does not start directly at the Enforcement Office. It requires a preliminary stage:
Stage 1: Obtaining a Court Judgment
The creditor must first file a lawsuit (alacak davası) at the competent Turkish court (typically a Commercial Court or Civil Court of First Instance, depending on the nature of the debt). This lawsuit aims to legally prove the existence and amount of the debt. Both parties present their evidence and arguments, and the court makes a final decision. This stage can be lengthy and complex, involving hearings and potentially expert reports.
Stage 2: Initiating Enforcement Proceedings
Once the creditor obtains a final and enforceable court judgment (kesinleşmiş mahkeme kararı) in their favor, they can then proceed directly to the Enforcement Office (İcra Dairesi). This judgment serves as conclusive proof of the debt. The Enforcement Office issues an “Enforcement Order” (icra emri) to the debtor, demanding payment.
Key Difference: In ilamlı takip, the debtor generally cannot object to the existence of the debt itself at the Enforcement Office stage, as this has already been decided by the court. Their grounds for objection are much more limited (e.g., claiming the debt has already been paid after the court decision). If the debtor fails to pay, the creditor can immediately request seizure (haciz) of the debtor’s assets.
While this path is generally longer due to the initial court phase, it is the necessary route for disputed claims and provides a very strong legal basis for enforcement once the court judgment is secured. Determining whether this or the ilamsız takip is the right strategy is a critical decision where the advice of a Turkish lawyer is essential.
The Role of a Turkish Debt Collection Lawyer
Attempting to recover debt in Turkey as a foreigner without local legal expertise is fraught with challenges. Language barriers, unfamiliarity with the strict procedures of the Enforcement and Bankruptcy Law, and the complexities of serving legal notices internationally can quickly derail your efforts.
An expert Turkish debt collection lawyer provides critical support throughout the entire process:
- Strategic Assessment: Analyzing your case from the outset to determine the most cost-effective and legally viable path (amicable negotiation vs. ilamsız takip vs. lawsuit).
- Precise Documentation: Preparing and filing all necessary legal documents (demand letters, execution requests, lawsuits) correctly and within the strict legal deadlines.
- Navigating Objections: Effectively countering any objections raised by the debtor, either through negotiation or by initiating the necessary court actions (annulment or removal of objection).
- Managing Enforcement: Actively managing the seizure (haciz) and sale process of the debtor’s assets once the debt is finalized, maximizing your chances of recovery.
- Cross-Border Expertise: Handling the complexities of international service of process (tebligat) and, if necessary, the enforcement of foreign judgments in Turkey (recognition and enforcement).
Partnering with a local law firm transforms a potentially frustrating and unsuccessful endeavor into a structured, professionally managed process aimed at achieving the best possible outcome for you, the foreign creditor.
What is the Definition of Debt Collection in Turkey?
It has been largely accepted that those three terms are interrelated and interchangeable.
Firstly, debt collection in Turkey means filing a lawsuit to tolerate an overdue payment.
Secondly, the term insolvency means the condition of not having enough money to pay debts. It necessarily follows that the involved person cannot have a chance to meet debt payments on time.
Thirdly, bankruptcy refers to a legal process when the relevant natural or legal person declares his/her/its debts will not be able to be paid.
What is an example of a debt collection?
The first requirement of a debt collection procedure is the existence of an overdue payment. That payment can be properly proven by payment through digital or physical banking receipt.
What is the most important strategy for carrying out a debt collection in Turkey?
One needs to bear in mind that a robust and workable strategy should be developed at the beginning for a successful outcome for debt collection in Turkey. The first thing needs to be considered is whether the debtor side or particularly debtor company is alive and active to meet any forcible seizure of debtor assets or not. Additionally, if the debtor company that had taken the payment is not alive; or the link between the company or the so-called company representatives is missing, the chance of success for any debt collection in Turkey will be quite lower. It is useful to be aware that even very well-known company information and trademarks may be misused by fraudulent people. For such types of cases, rather than performing a debt collection, starting with a criminal case may be much more logical.
For more information about criminal procedures take a look at our article on Criminal Cases in Turkey
How can debt collection in Turkey be performed?
After making sure of no need for criminal procedures, civil debt collection in Turkey should be carried out in two ways:
1.Without Court Judgment
Debt collection in Turkey can be performed without court judgment (ilamsız icra takibi in Turkish). The relevant enforcement debt collection office (icra kalemi in Turkish) will start the procedures after the application and following the review of necessary paperwork, set forth in the file. Upon a challenge by the debtor party, the case will be tried by commercial court.
2. With Court Judgment
Debt collection inTurkey can be carried out based on a civil court judgment ordering a specific amount of money transfer from the debtor to the creditor.
Asset Seizure for Debt Collection in Turkey
In general, any movable or immovable property, rights, or receivables owned by the debtor may be subject to seizure through both procedures. Pursuant to Article 85/1 of the Turkish Enforcement and Bankruptcy Law (EBL), assets sufficient to cover the debt—whether in the debtor’s possession or held by third parties—may be seized. Nonetheless, a wide margin of appreciation is granted to the judicial authorities to accept
What are the initial procedural requirements for a civil case aiming at debt collection in Turkey?
Compulsory Mediation: It is significant to know that a commercial dispute somehow should start with a compulsory mediation process before an assigned mediator first. In the absence of a fair agreement, the case will be tried by relevant commercial courts.
What is the seizure of company assets within the context of debt collection in Turkey?
Seizure of Company Assets: If the debtor company fails to pay the debt within the prescribed time or its objections are dismissed, the creditor may request a seizure from the enforcement office.
Security Deposit for Foreigners: In the absence of a mutual agreement or international agreement based on principle of reciprocity, security deposit payment is obligatory for foreign legal or natural entities
Interim Measure Requests: In the event that it is demonstrated that a delay may cause irreparable or hardly reparable damages, creditors may ask from the court to take interim measures including asset freezing of debtor side.
Our Leadership in International Debt Recovery
Successfully navigating cross-border debt collection requires a unique blend of expertise in both commercial transactions and robust litigation. Our firm’s strength in this demanding field is driven by the synergistic leadership overseeing our dedicated debt collection lawyer team.
Sevcan Gökalp İraz – Expertise in Dispute Resolution & Enforcement
Sevcan leads the execution phase, utilizing her extensive experience in litigation and enforcement proceedings (icra takibi). Her focus is on navigating the complexities of the Turkish court system and Enforcement Offices to secure judgments and effectively manage the seizure (haciz) of assets to maximize recovery for our clients.
Canan Vergili Oruç – Expertise in Corporate & Commercial Law (Istanbul)
Based in our Istanbul office, Canan provides the critical corporate and commercial law perspective. Her expertise in M&A and commercial contracts allows us to analyze the underlying transaction that led to the debt, ensuring our recovery strategy is built on a solid legal and commercial foundation.
Operating seamlessly from our key offices in Ankara (the administrative capital) and Istanbul (the commercial hub), our leadership ensures that every international debt collection case benefits from both strategic commercial insight and powerful legal enforcement capabilities.
Frequently Asked Questions (FAQ)
How long does the debt collection process take in Turkey?
The timeline varies significantly depending on the path taken. An amicable settlement can be reached in weeks. An execution without judgment can lead to payment within a month if the debtor does not object. However, if the debtor objects or a full lawsuit is required, the process, including court hearings and potential appeals, can take anywhere from several months to over a year or two.
What are the costs involved in debt collection?
Costs typically include official court and enforcement office filing fees, notary and translation fees, and professional legal fees. Legal fees can be structured in various ways, sometimes including an hourly rate, a fixed fee, or, in some cases for debt collection, a contingency fee (a percentage of the amount recovered), often combined with an initial retainer. It’s crucial to have a clear fee agreement with your lawyer upfront.
Can foreign court judgments be enforced in Turkey?
Yes, but not automatically. A final judgment obtained from a foreign court must first go through a “recognition and enforcement” (tanıma ve tenfiz) lawsuit in the competent Turkish courts. Turkey is a party to various bilateral treaties and the Hague Convention, which facilitate this process, but specific conditions must be met for the foreign judgment to be deemed enforceable by a Turkish court.
What happens if the debtor has no assets?
Unfortunately, even with a finalized execution file or a court judgment, recovery is only possible if the debtor has seizable assets (bank accounts, real estate, vehicles, income, etc.). A key part of the legal strategy involves conducting asset investigations (malvarlığı araştırması) at various stages to determine the debtor’s financial situation and the likelihood of successful recovery before incurring significant legal costs.
Conclusion: Secure Your Receivables with Expert Legal Guidance
In the light of the above-mentioned considerations, it becomes clear that debt collection in Turkey is not a very easy process. Understanding and absorbing key details is very critical for the best chance of achievement.
Successfully recovering debt from a debtor in Turkey requires a strategic approach, a deep understanding of Turkish Enforcement Law, and often, persistent legal action. For foreign creditors, navigating this process effectively necessitates partnering with experienced local counsel.
Choosing the right strategy—whether pursuing an amicable settlement, utilizing the fast track of execution without judgment (ilamsız takip), or initiating a full lawsuit—can significantly impact the speed and cost-effectiveness of your recovery efforts. Protecting your financial interests in cross-border transactions is a critical aspect of managing the legal risks of doing business internationally.
At Pi Legal Consultancy, our dedicated team is ready to provide the expert legal support you need to maximize your chances of successful debt collection in Turkey.
