Author: Berk Çektir Email: firstname.lastname@example.org Full Profile here
30 November 2015
Debt collection in Turkey is a big part of the Turkish legal industry. Different procedures apply to different claim types. Debt collections for unpaid checks are processed differently from debt collections for unpaid invoices due by a company. The timing, local procedures and even defense of the debtor when collecting an invoice are different from check collection procedures.
Pre-legal debt collection in Turkey
Whether it is a check/promissory note or unpaid invoice, you have a couple of options to start the process. The first and cheapest option is to go through pre-legal debt collection. This starts with a call to the debtor and progresses to sending a notification to the debtor. In some cases this process is fruitful, and a proper company usually pays the debt upon service of the notification. If asking the debtor to pay the outstanding amount and attempting an amicable solution fails, the case should be handled by official authorities.
Collecting unpaid invoices in Turkey
Another option is to initiate an execution proceeding via a bailiff/execution office against the debtor. Once the request is filed through the bailiff/execution office, the debtor will receive a payment order. The debtor can challenge the order, remain silent or accept the debt partially or fully. If the debtor does not contest the payment order, then remaining silent will be deemed as acceptance, and the payment order becomes due. At this stage the file can be processed by the bailiff/execution office.
In cases where the debtor contests, once their defense and objection are submitted, the process is stopped pending the creditor starting further legal proceedings against debtor before the courts
The claimant should then start a law suit to cancel the "contest proceeding" submitted by the debtor. This legal action, i.e., “cancellation of proceedings,” is handled by commercial courts and takes time. It is really difficult to say how long since it depends on the jurisdiction. The commercial records, commercial books of the parties, correspondence and notices between the parties are reviewed by the respected court during the course of the litigation. The court, at its absolute and sole discretion, makes a decision. The court may impose an extra fine, no less than 20% of the claim in dispute, plus interest. Following the finalization of the court case, the creditor can continue the debt collection process against the debtor.
Bailiff/execution offices are in charge of executing the order. However, this does not occur automatically and the process should be followed by a lawyer as the debtor has other procedural methods of defense during the course of the execution process. The execution process involves the liquidation of assets, bank funds (if any remain) and third party receivables. There are several other instruments which can be used to collect the debt in executing the official orders apart from those just listed.
Disclaimer: this article was accurate at the time of publication (30th November 2015). Before relying on its contents, consult a legal advisor for any relevant updates and applicability to your interests.