The area of law aims to settle conflicts amongst the creditor and the debtor is enforcement and bankruptcy law. If the debtor does not pay their debt, it includes the process of collecting the debt using a governmental entity within the legal bounds at the creditor’s request.

The collecting and recovering of creditors’ liabilities are governed by several enforcement and bankruptcy procedures under Turkish Enforcement and Bankruptcy Law No. 2004 (“EBL”).

There are two types of enforcement in the Turkish law system. These are enforcement proceedings with judgement and enforcement proceedings without judgement. These two enforcement proceedings have subtitles of their own.

Execution Proceeding Without Judgement:

this legal procedure refers to a situation in which a court order or administrative decision is enforced or carried out without the necessity for a separate judgment or trial. This often occurs when a prior judgment or decision has already been given by the court and the enforcement agencies move forward with enforcing the ruling.

It simply implies that the procedure for collecting the funds, assets, etc. can move on without the need for another judgment or trial if a court has already decided in the matter, such as ordering someone to pay a specific amount of money because of a lawsuit.

Here are some examples done without further judgement:

-general execution proceedings.

-execution proceedings of negotiable instruments (such as promissory notes, cheques, etc.).

-eviction of leased real estate without judgment.

The creditor sends an application to the execution office using the format that can be used in the execution case without a judgment. The execution office issues a payment notification to the debtor in response to this request, requiring payment within seven days. Debtor is given five days rather than seven to pay the amount in the payment order if the request for the payment order is based on a negotiable instrument.

The debtor has two options: pay the specified amount or challenge the payment order. The debtor is required to disclose his assets and possessions to the execution office if he or she does not oppose or opposes the debt.

The payment order becomes binding if the debtor doesn’t object, at which point the creditor may request that the execution office take and auction the debtor’s assets to meet the obligation. The execution officer can choose to stop the action if the debtor challenges the payment order.

The court will order a compensation to the creditor in addition to the amount claimed (the amount in the payment order) if the debtor’s objection is found to be unjust in the cancellation of the objection case. In practice, courts are not likely to order more than 20% in compensation. In the same way, a judge may order the creditor to give the debtor payment equal to at least 20% of the amount claimed if it determines that the objection was legitimate, and that the creditor started the process with malice. In circumstances when objections are being lifted, the same compensation law also applies. 10% financial penalties can be additionally applied in circumstances where the objection is lifted. The court imposes a 10% financial penalty if the debtor asserts that the signature on the document that the execution procedure was based on doesn’t belong to him/her even though it turns out that the signature does.

Enforcement Proceeding with Judgement:

Enforcement Proceeding with Judgment is a legal procedure that calls for a judgment before a court ruling or administrative decision may be enforced or carried out. This procedure, in contrast to “Execution Proceeding without Judgment,” entails getting a separate judgment to approve the enforcement of a decision.

Enforcement A legal process known as “proceeding with judgment” requires a judgment before a judge’s or administrative decision can be implemented or followed out. To approve the enforcement of a decision under this method, as opposed to “Execution Proceeding without Judgment,” an additional judgment must be obtained.

Bankruptcy Proceedings:

Initiating bankruptcy proceedings against the debtor is another way to collect financial debts.    Since all debts, including those that will be due in the future, will become due in bankruptcy and all the debtor’s assets will be subject to liquidation for the purpose of satisfying the creditor’s receivables, creditors may prefer to begin bankruptcy proceedings over beginning execution proceedings.  However, some creditors choose not to ask for the debtor’s bankruptcy because it typically takes bankruptcy litigation more than a year to resolve due to the burden of the commercial courts in Turkey. 

Only against merchants can bankruptcy procedures be started. If a merchant owes money, their creditors have the option of starting execution or bankruptcy proceedings before the execution offices. If the debtor.

(i) lacks a permanent address, 

(ii) is hiding to avoid paying his debts, 

(iii) engages in or attempts to engage in fraudulent practices that violate the rights of the creditors, 

(iv) conceals his assets during execution proceedings, or 

(v) the creditors are explicit; the creditors may also directly request a debtor’s bankruptcy from the appropriate commercial courts. 

Vi) The suggested concordat is not approved, or the concordat time frame is canceled or terminated. 

vii) The debt was unable to be settled through the enforcement of a court judgement

 viii) Capital company debt; and.

ix) The restructuring is terminated through conciliation or failure to complete its project.

The initial stage in non-direct bankruptcy court proceedings of a debtor is to request payment of the debt via the responsible execution authority. The debtor will subsequently receive a bankruptcy order of payment from the execution office.   The creditor may launch a bankruptcy case in the commercial court within the judicial circuit of the execution office within one year of the delivery of the bankruptcy payment order if the debtor fails to pay or disputes to it within seven days of its service.

The bankruptcy case will be put on hold if the debtor objects to the bankruptcy payment order. In this situation, the creditor will have one year from the date of service of the bankruptcy payment order to initiate a bankruptcy complaint before the commercial court. The court first considers the merits of the objection before reviewing the merits of the bankruptcy request. The bankruptcy case against the debtor becomes final if the court decides to cancel it, and the court then begins reviewing the bankruptcy request.

If the debtor’s consent is acquired, the creditor can drop the bankruptcy request while the bankruptcy case is ongoing. The bankruptcy ruling halts any execution actions taken against the debtor, so the latter may choose to move on with the bankruptcy complaint. In this scenario, a month after the withdrawal, the creditor may re-file the bankruptcy lawsuit.

On the motion of the creditor, commercial courts may order safeguards to be taken. The business court must approve temporary measures of protection if the debtor has not objected to the bankruptcy payment order.   These temporary steps comprise, but are not limited to, creating an asset list, assigning a trustee, etc.

Additional creditors of the debtor may contest the debtor’s bankruptcy within 15 days of the court’s judgment of bankruptcy being published in the Trade Registry Gazette. If the commercial court finds these arguments to be legitimate, it will issue a depository injunction and order the debtor to pay (or deposit) the obligations, plus interest and costs, within seven days of the order. The commercial court will next notify the debtor that, if such payment is not made, the court will declare bankruptcy. The court will not grant the bankruptcy application if the debt is settled or submitted to the court within these seven days. Alternatively, at the first hearing after the order, the court will grant the bankruptcy decision.

The authorized bankruptcy office receives the decision of bankruptcy once it has been approved by the commercial court. The administrative entities in charge of handling bankruptcy procedures are the bankruptcy offices. The bankruptcy office notifies associated individuals and entities of the debtor’s bankruptcy and notifies creditors and other entities of the bankruptcy.