Enforcement and
Insolvency

In Türkiye, enforcement and debt collection are carried out through different procedures depending on the nature of the claim and the document on which it is based. A court or arbitral award, a contract, an invoice, a current account record, a lease agreement, a mortgage, a pledge, a check, a promissory note or a bill of exchange are not subject to the same enforcement route. Before enforcement is started, the maturity of the claim, the request for interest, subject-matter and territorial jurisdiction, the statute of limitations, security and the legal status of the debtor are reviewed together.

The main services we provide in this area are:

• Legal analysis of the basis, amount, ancillary claims, security and collection options of the claim
• Preparation and conduct of enforcement without a judgment through the general attachment route
• Enforcement based on a judgment, on documents with the force of a judgment and on arbitral awards
• Attachment-route enforcement specific to negotiable instruments based on checks, promissory notes and bills of exchange
• Enforcement by realization of the pledge, including mortgages and pledges over movables
• Collection of rent claims and, where the conditions are met, eviction of the leased property through enforcement
• Requests for precautionary attachment for monetary and security claims where the conditions are met, and execution of the order
• Follow-up of attachment, safekeeping, valuation, requests for sale and electronic sale procedures
• Attachment notice procedures for the debtor’s rights and receivables held by third parties
• Entry of collected funds into the file, ranking and distribution, and conclusion of the file
• Procedures relating to a provisional or final certificate of insolvency and a pledge shortfall certificate, and subsequent enforcement of the claim
• Identification of the enforcement routes available against the estate or the heirs in the event of the debtor’s death
• Conduct of settlement, payment plan, installment or debt restructuring negotiations on a sound legal footing

The enforcement route and the scope of the request are determined not only by the speed of collection but by an assessment that takes into account legal validity, costs, the ability to prove the claim, the other side’s likely objections and collectability.

Enforcing an individual claim and managing a corporate claims portfolio made up of many files do not call for the same working method. In corporate collection work, the classification of files, the standardization of documents, verification of debtor and security information, regular monitoring of enforcement proceedings and clear reporting to the client are important.

In our work as creditors’ counsel, we focus in particular on the following claims:

• Commercial claims arising from contracts, delivery of goods or services, invoices and current account relationships
• Claims based on checks, promissory notes, bills of exchange and other negotiable instruments
• Claims arising from credit, loan, suretyship, guarantee, mortgage and pledge relationships
• Claims arising from rent, dues, common expenses and the use of immovable property
• Claims for damages, labor, consumer and other monetary claims that have been established by a court judgment
• Claims portfolios of companies arising from dealer, distributor, supplier, customer and subscription relationships
• Claims of foreign individuals and legal entities against debtors or assets located in Türkiye

In corporate files, the frequency of reporting, the authority matrix, settlement limits and the method of communication can be set at the start of the engagement. The aim is also to set aside, with reasons, files that have no collectability or that are not economically worth pursuing.

Monetary claims arising from subscription contracts such as electricity, water, natural gas, telephone and internet, and falling within the statutory scope, can be pursued through the Central Enforcement System (Merkezî Takip Sistemi) within UYAP under Law No. 7155. For subscription claims pursued through an attorney, this system allows procedures to be carried out electronically up to the attachment stage.

In this context, the services are:

• Reviewing whether a subscription claim falls within the scope of the Central Enforcement System
• Monitoring the electronic enforcement request, the payment order, service and payment procedures
• Assessing objections to the debt or to jurisdiction and the legal routes available after an objection
• Procedures for moving to the attachment stage once the enforcement proceedings become final
• Reporting on and managing corporate portfolios made up of many subscription files

These services are provided.

For subscription claims under Law No. 7155 that are pursued through an attorney, whether the special system must be used and the cases outside its scope are determined at the outset. Not every invoice or commercial claim is subject to the Central Enforcement System.

The death of the debtor does not by itself extinguish an existing debt; however, against whom, at what stage and with what assets the enforcement can be continued is determined by the rules of inheritance and enforcement law. Acting without reviewing together the disclaimer of inheritance, the presumed disclaimer (hükmen ret), the official liquidation of the estate and the liability of the heirs can lead to errors regarding the parties and the proceedings.

In this context:

• Obtaining the certificate of inheritance and identifying the heirs
• Reviewing the legal position of pending enforcement after the debtor’s death
• Assessing the conditions for enforcement against the estate or the heirs
• The effect on enforcement of a disclaimer of inheritance, a presumed disclaimer and official liquidation of the estate
• Attachment procedures over inheritance shares and estate assets
• Liquidation of an insolvent estate under the provisions on bankruptcy

Legal support is provided on these matters.

Facing a payment order or an attachment does not necessarily mean that the debt is legally valid. However, because objection and complaint periods are often short, the payment order and its attachments should be reviewed without delay. The competent authority, the time limit and the grounds that can be raised vary according to the type of enforcement.

The main steps taken in the course of representing a debtor are:

• Objection to the debt, interest and jurisdiction and, where the conditions are met, to the signature
• Complaint against unlawful aspects of the payment or enforcement order
• Assessing claims of limitation, payment, release, set-off and offsetting
• Negative declaratory actions and recovery actions aimed at getting back money that has been paid
• Complaints of excessive attachment, exemption from attachment and residence exemption (meskeniyet)
• Reviewing attachments over salary, wages, pensions, bank accounts and receivables held by third parties
• Applications against attachment notices under Article 89 of the Enforcement and Bankruptcy Law
• Third-party ownership claims and actions concerning attachments over property that does not belong to the debtor
• Objection to a valuation and requests for annulment of the auction

• Complaint about defective service and determining the legal consequences of the dates of service and of learning
• Applications for cancellation or suspension of the enforcement proceedings and for stopping the enforcement act
• Procedures for the stay of enforcement at the stage of the appeal
• Reviewing objections concerning capacity to be a party and to conduct proceedings, standing, representation and authority to pursue enforcement

Representing a debtor does not consist of steps aimed at postponing the debt. The aim is to verify the lawfulness of the enforcement proceedings, to determine the actual amount of the debt, to apply the statutory protections and, where possible, to develop a sustainable solution.

An appeal to the regional court of appeal or to the Court of Cassation does not by itself stay the enforcement of every judgment. The security required under Article 36 of Law No. 2004, the time limit and the order to be obtained from the enforcement court at the place where the enforcement is conducted are assessed separately. Judgments that cannot be enforced before they become final and the special rule on maintenance are reserved.

Believing that you are not a debtor does not make it safe to leave an attachment notice unanswered. The notice may have been sent on the allegation that you owe a debt to the enforcement debtor or hold property belonging to the debtor.

• Separate review of the service of the first and second attachment notices, the grounds of objection and their seven-day time limits.
• Review of the conditions for a payment action or negative declaratory action in respect of the third notice, and of the time limit for notifying the enforcement office that the action has been filed.
• Documenting the real relationship through current account, payment, delivery, assignment and third-party records.

The special negative declaratory route under Article 89 of Law No. 2004 is not treated as the same as the general negative declaratory action under Article 72. Liability that may arise from an incorrect or untrue statement is also assessed.

A negative declaratory action seeks a determination that the debt is not owed; a recovery action seeks, where the conditions are met, the return of money paid under the threat of enforcement. The type of action, the time of payment and the special time limits are determined.

Under Article 72 of Law No. 2004, the scope of interim protection differs between actions filed before and after the enforcement proceedings. In a general negative declaratory action filed after the enforcement proceedings, an interim injunction cannot be granted to stop the enforcement; where the conditions and security are met, it can be requested that the money held at the enforcement office’s cashier not be paid to the creditor. Special provisions are reviewed separately.

An action for annulment of objection and the removal of objection are also not the same route: the competent authority, the document requirement, the review and the time limit differ. In monetary actions of a commercial nature, the mediation requirement under Article 5/A of the Turkish Commercial Code is assessed.

In attachment and sale, the aim is not merely to place a record on an asset but to carry out, in the correct order, the steps that will secure collection of the claim lawfully and economically. Asset inquiries that can be made through official systems, attachments of movable and immovable property, bank and third-party receivables, company shares, vehicles, rights and other economic values are reviewed according to the characteristics of the file.

In this process:

• The attachment request, execution of the attachment and the necessary safekeeping measures
• Observing the special rules on attachment in a residence and on property exempt from attachment
• Assessing third parties’ claims of ownership and third-party ownership claims
• Reviewing the valuation report and, where necessary, objecting to it
• Following the sale of movable and immovable property through the UYAP e-Sale system
• Auction preparation, conditions of sale, payment of the auction price and registration procedures
• Assessing the route of annulment of the auction where irregularities are alleged
• Distribution of the sale proceeds, the ranking schedule and review of priority claims
• Assessing participation in an attachment and disputes over ranking among creditors

Legal services are provided on these matters.

Attachment, safekeeping and sale are different procedures. Court approval for attachment in a residence, exemption from attachment and exceptions specific to precautionary attachment are reviewed together. Whether the request for sale and the timely payment of the required expense have been made is also monitored separately, as it affects the fate of the attachment and the sale procedures.

The attached asset belonging to a third party, the attachment exceeding the amount of the claim and the attachment being directed at a value that cannot lawfully be attached are different grounds for an application. Ownership, possession, invoices, and delivery and payment records are assessed together.

• The ownership-claim procedure, the parties and the state of the evidence where a third party asserts ownership.
• The special protections of the relevant law for a residence, wages, pensions and essential items.
• Requests to lift or narrow attachments that exceed the claim or are unlawful in respect of their subject.

The same exemption from attachment does not arise for every residence, wage or bank account. The type of debt, the nature of the asset, the statutory exceptions and the time limits are reviewed.

• Obtaining a provisional or final certificate of insolvency and reviewing its legal consequences
• Procedures relating to the pledge shortfall certificate for a claim not covered by the pledge
• Assessing the enforcement routes available against assets that the debtor acquires later
• Reviewing files that have been taken off the docket and that need to be renewed or re-enforced

Not every dispute arising from enforcement proceedings can be resolved at the enforcement office. Depending on the nature of the dispute, it may be necessary to apply to the civil enforcement court, the criminal enforcement court (icra ceza mahkemesi) or the competent general court. The main actions and matters handled by the firm as counsel for a creditor, a debtor or a third party are:

• Complaint against the acts of the enforcement office
• Requests for the removal of an objection and for eviction
• Actions for annulment of objection and, where the conditions are met, claims for compensation for unfounded denial in enforcement (icra inkâr tazminatı)
• Negative declaratory actions and recovery actions
• Third-party ownership claims and the related actions
• Actions for annulment of dispositions and the assessment of simulation claims within the framework of the relevant legal rules
• Objection to a valuation and annulment of the auction
• Complaints against the ranking schedule and actions objecting to the ranking schedule
• Disputes arising from pledge, mortgage, suretyship and security relationships
• Compensation for losses alleged to have arisen from an unjustified precautionary attachment, and disputes concerning security
• Claims for compensation against the State, where the statutory conditions are met, for losses alleged to have arisen from the faulty acts of enforcement and bankruptcy office officials

The assessment of mediation as a condition of suit, subject-matter and territorial jurisdiction and time limits is made separately for each dispute. In particular, in actions for annulment of objection, negative declaratory actions and recovery actions of a commercial nature, the current provisions on mediation must be taken into account.

An allegation that a debtor has concealed assets from creditors or carried out transactions that make collection difficult must be examined on the basis of the dates of the transactions, the relationship between the parties, the consideration, the time the debt arose and concrete evidence. Just as not every transfer is invalid by itself, not every suspicious transaction is the subject of the same type of action.

Annulment of Dispositions and Simulation Claims

• Action for annulment of dispositions under the Enforcement and Bankruptcy Law
• Determining the legal nature of claims based on an allegation of simulation
• Reviewing sales, transfers, gifts and security transactions made to third parties
• Assessing records relating to company shares, immovable property, vehicles and other asset values
• Compulsory enforcement and sale procedures after an annulment order

• Assessing the options of precautionary attachment and interim injunction
• Requests to determine, change or lift the security to be provided in a precautionary attachment
• Objection to a precautionary attachment order and procedures for lifting the order
• Assessing the compensation and other routes of recourse available to a debtor or third party affected by an unjustified precautionary attachment

These procedures are carried out as counsel for a creditor, a debtor or a third party. The granting of protective orders depends on the conditions laid down in the law being proved in the specific case.

Composition with creditors (konkordato) is a judicial restructuring route that allows a debtor who cannot pay its debts when due, or who is at risk of being unable to pay them, to present a payment plan to its creditors under the statutory conditions. The process must be handled carefully not only for the debtor but also for creditors who wish to protect the nature of their claim, their security and their right to vote.

Composition services for the debtor

• Assessing the options of an ordinary composition, a composition after bankruptcy or a composition by assignment of assets
• Preparing the preliminary composition plan and the documents required by law, in coordination with financial advisers (mali müşavir), independent auditors and other experts
• Requests for a provisional moratorium and a final moratorium, and following the court process
• Legal support concerning the acts of the composition commissioner and the creditors’ committee
• Legal assessment of negotiations with creditors, the payment plan and the security structure
• Confirmation or rejection of the composition, and appeal procedures
• Procedures concerning requests for the partial or complete revocation of the composition

Composition services for the creditor

• Monitoring announcements and moratorium orders
• Timely notification and registration of the claim, and handling objections
• Assessing the legal position of claims that are secured by a pledge, privileged, disputed or conditional
• Taking part in creditors’ meetings, negotiations and voting
• Reviewing the effect of the composition plan submitted for confirmation on the claim and the security
• Applications and appeals against a confirmation or rejection order

The filing of a composition request alone does not stop all enforcement proceedings; the court’s moratorium order and the exceptions in the law are decisive. The effects on pledge-secured claims, privileged claims, sureties and co-debtors are reviewed separately. The route of postponement of bankruptcy, which has been abolished, is not presented as a current option for new applications.

For persons subject to bankruptcy and for merchants, bankruptcy is a comprehensive process that affects the debtor’s entire estate and the collective satisfaction of the creditors. For both the creditor and the debtor, the conditions of bankruptcy, bankruptcy through enforcement proceedings or direct bankruptcy, security, the possibility of a composition and the liability of company managers are addressed together.

The main procedures carried out in bankruptcy law are:

• Bankruptcy through enforcement proceedings and the bankruptcy action
• Direct bankruptcy requests in the cases provided by law
• Applications concerning the bankruptcy payment order, the deposit order and the bankruptcy order
• Appeal to the regional court of appeal against the bankruptcy order and, where the conditions are met, to the Court of Cassation
• Formation of the bankruptcy estate and liquidation of the assets
• Registration of the claim in the bankruptcy estate, late registration and applications against the rejection of a registration request
• Complaints or actions of objection against the ranking schedule
• First and second creditors’ meetings and the acts of the bankruptcy administration
• Summary and ordinary liquidation processes
• Removal of property from the estate and third-party ownership claims
• The position of claims secured by a pledge and of privileged claims
• Distribution of funds, certificate of insolvency, and closure or lifting of the bankruptcy

In capital companies, a deterioration in the financial position is not merely a collection problem. The loss of capital, over-indebtedness, the preparation of an interim balance sheet, the reporting and filing obligations of the management body and the possible liability of managers must be assessed within the framework of the Turkish Commercial Code and the relevant legislation.

The work in this area covers the following:

• Joint assessment of the financial statements and indicators of over-indebtedness by lawyers and financial experts
• Determining the statutory obligations of the board of directors or the managers
• Comparing composition, capital measures, a settlement protocol and other applicable restructuring options
• Reviewing creditors’ claims concerning security, enforcement and liability
• Separating the liability of the company for its debt from the personal liability of a shareholder, manager or legal representative
• Assessing the provisions on suretyship, guarantee, aval, joint debt and joint and several liability
• Enforcement of personal security provided by a shareholder, manager, legal representative, surety or guarantor
• Reviewing the effect of a company’s merger, demerger, change of legal form or liquidation on existing enforcement proceedings and claims
• Attachment procedures over company shares, membership rights and dividend claims

These headings are covered.

Not every economic difficulty has to end in bankruptcy or composition. For capital companies and cooperatives, restructuring through the settlement route provided by law, and the financial restructuring options under the framework agreements of banks and financial institutions, can be assessed within the framework of the conditions in force. In addition, settlements, maturity, installment, security and waiver arrangements made with creditors should be secured by clear and workable agreements.

In this context:

• Assessing the conditions for financial restructuring under Banking Law No. 5411
• Restructuring of debts owed to banks and to leasing, factoring and financing companies
• Negotiating maturity, interest, additional financing, security and payment terms under framework agreements
• Preparing restructuring agreements, payment protocols, acknowledgments of debt, releases and security documents
• Reviewing the effect of the restructuring on existing enforcement proceedings, pledges, suretyships and other security
• Regulating the legal consequences that will arise if the terms of the restructuring are breached

Legal support is provided on behalf of the debtor or the creditor on these matters.

It is not assumed that enforcement proceedings stop once negotiations begin. The current special regime and framework conditions, the effect of the payment plan on security, acceleration, and the scope of the release and waiver are clarified in writing.

Claims by foreign individuals and legal entities directed at a debtor or assets in Türkiye may require additional review, such as the applicable law, international jurisdiction, the form of foreign documents, service, security, claims in foreign currency and the effect of foreign judgments.

In international debt collection:

• Enforcement with or without a judgment in Türkiye for foreign creditors
• Procedures directed at bank accounts, movable and immovable property, company shares and other asset values located in Türkiye
• Recognition and enforcement of foreign court judgments in Türkiye
• Enforcement and implementation of foreign arbitral awards
• Apostille, certification, translation and service abroad
• Assessing foreign-currency claims, interest, and the choice-of-law and jurisdiction provisions in the contract
• Following the rights of a foreign debtor or creditor in composition and bankruptcy proceedings in Türkiye
• Coordination with local lawyers for the use abroad of judgments or enforcement documents obtained in Türkiye

Services on these matters are provided in Turkish, English, German and Russian.

Mere recognition of a foreign judgment does not take the place of the enforcement required for compulsory enforcement. Local procedures directed at assets abroad are carried out by a lawyer authorized in the relevant country; the scope and fee of the coordination are determined separately.

Related detailed page: International Debt Collection and Cross-Border Enforcement

The collection of taxes, fees, administrative fines and other public receivables is, as a rule, subject to a regime different from that of Law No. 2004 on Enforcement and Bankruptcy. Payment orders, precautionary attachment, e-attachment (e-haciz), the declaration of assets, the liability of legal representatives or partners, and compulsory collection procedures are assessed within the framework of Law No. 6183 and the relevant tax and administrative law rules.

Where enforcement concerning a public receivable is involved, the competent authority, the time limit for filing an action and the conditions for a stay of execution are reviewed specifically; where necessary, the process is conducted together with the Tax Law and Administrative Law practice areas.

Being able to start enforcement proceedings and filing an action arising from the proceedings or concerning the merits of the claim may be subject to different rules. Depending on whether the dispute arises from a commercial, employment, consumer, lease or other legal relationship, mediation as a condition of suit may come into play. Whether mediation is required is therefore determined separately, on the basis of the type of action and proceedings.

In files where the parties are open to an agreement, the payment date, installments, interest, security, expenses, release, waiver and the consequences of default are regulated so as to leave no room for doubt. Whether the agreement should, where necessary, be converted into a document with the force of a judgment, or its direct enforceability, is also assessed separately.

Certain acts in the course of enforcement and bankruptcy may give rise to sanctions that are subject to special complaint and trial procedures. The right to complain, the time limit, the competent court, the elements of the act and the persons responsible are examined separately in every file.

In this context, the main matters are:

• Breach of an undertaking to pay
• Non-compliance with a maintenance judgment
• Allegations of a false declaration of assets or of failure to report an increase in assets and income
• Allegations of reducing existing assets with the aim of harming the creditor
• The special liabilities provided by law for managers of commercial enterprises
• Acts that may give rise to special sanctions in bankruptcy and composition processes
• Complaint and defense procedures under Check Law No. 5941 concerning the “returned for lack of funds” notation, the judicial fine, and the ban on issuing checks or opening a check account

These matters are handled. If allegations of fraudulent or negligent bankruptcy arise under criminal law, the process is assessed together with the criminal law practice.

Failure to pay a debt is not in every case, by itself, a ground for imprisonment. The separate conditions, right to complain and time limits are reviewed with respect to a valid enforcement undertaking, a maintenance obligation or an act under a special law. A payment protocol and an enforcement undertaking are not the same document.