DEBT COLLECTION IN TÜRKİYE

Debt collection is a crucial aspect of financial management, ensuring that creditors can recover debts owed to them. In Türkiye, the process of debt collection is governed by a comprehensive legal framework, which provides various methods for creditors to pursue outstanding debts. This article delves into the key mechanisms of debt collection in Türkiye, including execution proceedings, debt recovery lawsuits, and alternative dispute resolution methods, providing a detailed understanding for creditors seeking to navigate the complexities of debt collection.

Debt Collection Through Execution Proceedings

Execution proceedings are a primary method for debt collection in Türkiye. Creditors can initiate these proceedings without necessarily having a document that explicitly proves the debt. However, in cases where the debtor objects to the execution, the creditor must present evidence to substantiate the claim. Such evidence may include promissory notes, lease agreements, or bank receipts that demonstrate a financial relationship between the parties.

Once the creditor has sufficient evidence, they can apply to the enforcement office for debt collection. The eligibility of the parties and the adherence to legal conditions are crucial for the execution process to proceed. For instance, execution cannot be carried out against a deceased debtor; instead, the heirs become the parties to the execution.

If the execution request meets the legal requirements, the enforcement office issues a payment order to the debtor. The debtor has the option to object to this order within seven days. If there is no objection, the execution becomes final, allowing for the seizure and sale of the debtor’s assets to satisfy the debt. In the event of an objection, the creditor must seek a court’s intervention to resolve the dispute and proceed with the execution.

Debt Collection Through Lawsuits

Filing a lawsuit is another avenue for debt collection in Türkiye. This method is particularly suitable for creditors who prefer to obtain a court judgment before initiating execution proceedings or have uncertainties regarding the amount or existence of the debt.

In this process, the creditor submits a petition and evidence to the court. Upon verifying that the lawsuit meets legal criteria, the court serves the petition and attachments to the defendant, who is then expected to respond. Depending on the complexity of the case, the litigation procedure may involve one or two petitions from each party.

The substantive phase of the trial involves gathering evidence, obtaining expert reports, and ultimately, the judge’s decision. The creditor can appeal the decision for further review. Once a final decision is reached, the creditor can either negotiate with the debtor for payment or enforce the judgment through the enforcement office.

Alternative Dispute Resolution Methods

Besides traditional legal proceedings, creditors can explore alternative dispute resolution methods such as arbitration and mediation for debt collection.

Debt Collection Through Arbitration

Arbitration is an alternative to court litigation, where parties agree to resolve their dispute through an arbitration panel. The process is generally faster and can be initiated based on an arbitration clause in a contract or a separate agreement. After presenting their case and evidence to the arbitrators, a hearing is conducted, and a binding decision is made. To enforce an arbitration award, a court’s enforceability clause is required, after which the award can be executed similarly to a court judgment.

Debt Collection Through Mediation

Mediation is another method gaining popularity in Türkiye, where a mediator facilitates dialogue between parties to reach a mutually acceptable agreement. The agreement reached through mediation can be enforced like a court judgment if necessary. Mediation offers a more amicable approach to resolving disputes and often results in compliance with the agreed terms.

Debt Collection Through Debt Assignment

Debt assignment is a strategy where the creditor transfers the receivable to a third party in exchange for immediate payment. This method allows the creditor to recover a portion of the debt without initiating legal proceedings. The third party acquiring the debt can then pursue legal action against the debtor. However, this approach may result in the creditor receiving less than the full amount owed.

Frequently Asked Questions

Q1: How can a foreign creditor recover a debt in Türkiye?

A1: Foreign creditors must adhere to the principle of reciprocity and may need to provide a security payment to the court or enforcement office. Documents submitted must be translated and legalized if not in Turkish.

Q2: Can interim measures be taken during debt collection?

A2: Yes, creditors can apply for interim measures to secure their chances of recovering the debt.

Q3: What types of legal actions can be taken to recover debt in Türkiye?

A3: Creditors can pursue debt collection through execution proceedings, lawsuits, arbitration, mediation, and other alternative dispute resolution methods.

Q4: Which documents are required to initiate debt collection procedures in Türkiye?

A4: While attaching a document is not mandatory for execution proceedings, providing evidence such as invoices, contracts, or promissory notes is advisable. A power of attorney is required if an attorney represents the creditor.

Q5: What is the best way to recover debt in Türkiye?

A5: The choice of debt collection method depends on the circumstances and the parties involved. It is advisable to consult with an attorney in Türkiye to determine the most suitable approach and ensure legal compliance.

Debt collection is a multifaceted process that requires a thorough understanding of the legal framework and the available methods in Türkiye. Whether through execution proceedings, lawsuits, arbitration, mediation, or debt assignment, creditors have various options to recover debts. It is crucial for creditors to assess their situation, choose the appropriate method, and seek legal guidance to navigate the debt collection process effectively.

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Att. ÖMER FARUK KILIÇ

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