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Enforcement Law and Debt Collection in Turkey
Article Keywords: Enforcement law in Turkey, dept collection in Turkey, enforcement law and debt collection in Turkey.
This article explains enforcement law and debt collection in Turkey in detail.
Article Publish Date: December 2, 2020.
Article Last Update Date: August 10, 2021.
Depending on the legal power of the document owned by the creditor, Turkish enforcement legislation provides legal remedies for execution procedures and rights to creditors. There are several sorts of procedures that can be used to collect a debt from a debtor, and both collection and execution proceedings are subject to distinct regulations that must be followed.
Enforcement Law, Debt Collection and The Way They Work in Turkey
Enforcement law in Turkey is an alternative legal remedy that allows the collection of money receivables without requiring a court decision.
On the other hand, dept collection in Turkey is a special method of legal remedy that allows the creditor to be charged in a short way from the point of view of borrowers who do not pay their debt.
If the creditor’s claim for receivables is not objected to, the debtor’s movable and immovable assets can be met by confiscation by state force. The way the enforcement directorates perform the process by force with legal authority makes the enforcement law in Turkey more functional.
This process also allows the creditor to get his or her receivables in a shorter time than the trial process. Enforcement law in Turkey is used as an alternative way against the path of litigation for the creditor to get their receivables due to these criteria of functionality and duration.
Related Article: Litigation in Turkey.
Special Enforcement Proceedings in Turkish Legislation
The legal remedies for execution procedures and the rights provided to the creditor are determined by the legal power of the papers on which the proceeding is based, according to Turkish enforcement legislation. For each legal situation, there are several sorts of processes. The payment and objection periods, as well as the penalties of the objection, change for each type of operation.
If a creditor has a security over the debtor’s assets (e.g., a mortgage, movable pledge, share pledge, or bank account pledge), the creditor must first initiate special execution proceedings against the debtor, which is known as “enforcement by foreclosure of collateral,” according to Article 45 of Turkey’s Enforcement and Bankruptcy Law (“EBL”). If the security is insufficient to cover the credit, the creditor may begin further execution actions, which will be determined based on the creditor’s power of attorney.
Debt Collection Process in Turkey
If the creditor wants to use the enforcement path to obtain his or her receivables, he or she must initiate an enforcement follow-up at the competent and authorized Enforcement Directorate on this issue.
Enforcement follow-up begins with a follow-up request to be given to the enforcement director by the creditor. A payment order is sent to the borrower upon a follow-up request. The debtor objects or does not object to the payment order within the specified time period.
If the payment order was challenged by the debtor, this means that the debtor does not accept the debt that constitutes the subject of follow-up. It is at this point that the state’s use of power comes into play to collect what you are owed. The debtor’s goods and receivables, as well as rights and receivables from third parties, can be collected by foreclosure.
Types of Debt Collection Processes in Turkey
Follow-up without an order: The way of execution that creditors who do not have a court order or who do not apply for an order of execution, despite the fact that they have it, apply to obtain their receivables. The ability to apply for an enforcement path without the need for any documents is an arrangement in favor of the creditor. This is one of the main factors that increase the applicability of enforcement law in Turkey. The appeal period for the payment order is arranged as seven days in follow-up without notice.
Follow-up with an order: It is a type of follow-up based on decisions made as a result of the trial of the courts. For receivables whose subject matter is something other than money, the creditor must apply for the declared execution method. The execution process in Turkey may be subject to execution follow-up with the definition and enforcement of foreign court decisions related to the performance of work.
Follow-up for exchange notes: In this case, the creditor must have a bill of exchange in his or her possession, such as; check, bond, policy, etc., they are accepted as a foreign exchange ticker. Although the tracking path specific to exchange notes is one of the types of unannounced tracking, the procedure for appealing the debtor’s appeal is more difficult but easier to prove from the point of view of the creditor.