Debt Collection in Turkey: How Foreign Companies Can Recover Their Money
When a Turkish customer does not pay, many foreign companies feel stuck. Different language, unfamiliar procedures and distance can make the situation stressful. However, Turkish law provides clear tools for commercial debt collection, and foreign creditors can use them effectively if they understand the basic mechanisms.
This article explains, in simple but legally accurate language, how a foreign company can recover its money from a debtor in Turkey.
1. Identify the Legal Basis of the Debt
The first step is to understand why the debtor owes you money under Turkish law. Typical legal grounds are:
- A written contract (sale of goods, services, loan, distribution, franchise, etc.)
- Invoices issued according to that contract
- Bills of exchange such as cheques or promissory notes
- Unjust enrichment, if money was paid without valid cause
- Tort or other damage claims in more complex cases
Before taking action, your lawyer will usually review:
- The signed contract and general terms
- Original invoices and delivery notes
- E-mails or messages acknowledging the debt
- Any guarantees (personal or corporate) and securities
This analysis helps decide whether the claim is clear and liquid (easy to prove, suitable for fast enforcement) or needs a full court case.
2. Amicable Collection and Formal Notice
Turkish practitioners usually start with amicable collection:
- Phone calls and reminder e-mails
- Short negotiation on partial payment or instalments
- Simple restructuring proposals
If this fails, the next step is a formal demand letter sent to the debtor’s address in Turkey, usually by a local lawyer. This letter should:
- Describe the parties and the legal relationship
- State the exact amount claimed (principal, interest, if applicable)
- Refer to the main documents (contract, invoice, cheque, etc.)
- Grant a final deadline for voluntary payment
- Clearly warn that enforcement proceedings will start if payment is not made
A properly drafted demand letter shows seriousness, preserves evidence and sometimes leads to a last-minute settlement.
3. Enforcement Proceedings Without Judgment
The main practical tool for collecting debts in Turkey is enforcement through the Enforcement Offices (İcra Daireleri). For many commercial claims, creditors may use enforcement without a prior court judgment.
3.1 Starting the Enforcement
Your Turkish lawyer files an enforcement request with the competent Enforcement Office. The application includes:
- Debtor’s full name, registration or ID number and address
- The claimed amount (in Turkish lira or foreign currency)
- A short explanation of the legal basis (for example: “unpaid invoice for goods delivered under contract dated …”)
The Enforcement Office then issues a payment order and serves it on the debtor.
3.2 Debtor’s Options
Once the payment order is served, the debtor usually has a short statutory period to react. During this time the debtor may:
- Pay the debt in full, or
- File a formal objection to the enforcement
If the debtor does not object in time, the enforcement becomes final and the creditor may proceed to:
- Seizure of bank accounts
- Seizure of movable assets and vehicles
- Placement of liens on real estate
- Seizure of receivables from third parties
If the debtor objects, the enforcement is suspended as to the contested part, and the creditor must continue before the courts.
4. Court Proceedings and Enforcement With Judgment
If the debtor contests the claim or if the nature of the claim requires it, the creditor may need a court judgment.
4.1 Court Case
The creditor (often through a Turkish attorney) files a lawsuit before the competent commercial court. Jurisdiction is usually based on:
- The debtor’s domicile or registered seat, or
- The place of performance of the contract
In the court case, the creditor must prove its claim with:
- The underlying contract and general conditions
- Invoices and delivery documents
- Correspondence, minutes, and payment records
- Expert reports, if technical issues arise
After examining the evidence, hearing the parties and, if necessary, experts or witnesses, the court issues a reasoned judgment.
4.2 Enforcement Based on Judgment
A final and enforceable judgment is then used to start enforcement with judgment. The procedure is similar, but:
- The Enforcement Office acts based on the court decision
- The debtor’s ability to object is more limited
- Seizure and liquidation of assets can move forward more firmly
Many debtors choose to settle once they see that enforcement based on a court decision will seriously affect their assets and business.
5. Foreign Judgments and Arbitral Awards
Sometimes the foreign company already has:
- A foreign court judgment, or
- An international arbitral award against the Turkish debtor.
These decisions are not automatically enforceable in Turkey. The creditor must first apply to a Turkish court for:
- Recognition, and
- Enforcement of the foreign judgment or award.
The court checks procedural and substantive conditions such as:
- Jurisdiction of the foreign court or tribunal
- Proper service and right to defence
- Compatibility with Turkish public order
- Reciprocity or treaty conditions in some cases
Once the Turkish court grants recognition and enforcement, the foreign judgment or award is treated like a Turkish judgment, and the creditor may proceed with enforcement.
6. Interim Measures and Provisional Attachment
To prevent the debtor from hiding or selling assets during the dispute, Turkish law allows certain interim measures, especially:
- Provisional attachment over bank accounts, receivables, vehicles or other assets
- Interim injunctions to protect specific rights or prevent transfers
To obtain these measures, the creditor generally must:
- Show a prima facie claim (initial evidence that the debt exists), and
- Demonstrate a risk of non-collection if no measure is granted
Courts can require the creditor to deposit a counter-security to protect the debtor against possible damages if the measure later proves unjustified. Proper use of provisional attachment is often critical to achieving an effective result at the end of the proceedings.
7. Mediation and Time Limits
In Turkey, many commercial disputes are subject to mandatory mediation before a lawsuit can be filed. For relevant claims, the creditor must:
- Apply to a registered mediator,
- Attend at least one mediation session (physically or through a representative),
- Obtain a mediation report (agreement or non-agreement).
If this step is skipped in cases where mediation is mandatory, the court may reject the lawsuit on procedural grounds.
Creditors must also respect limitation periods. For many commercial receivables, the limitation period is shorter than the general rule. Therefore, foreign companies should act quickly and avoid long periods of inactivity after default.
8. Practical Recommendations for Foreign Creditors
To improve your chances of successful recovery in Turkey:
- Draft robust contracts
- Use clear language on payment terms, interest and default.
- Include governing law, jurisdiction or arbitration clauses.
- Specify a service address in Turkey for the debtor.
- Strengthen your security position
- Request personal or corporate guarantees.
- Consider pledges, mortgages or other real securities.
- Use instruments like cheques or promissory notes where appropriate.
- Keep your documentation in order
- Issue proper commercial invoices.
- Keep signed delivery notes and transport documents.
- Preserve all correspondence confirming orders and acceptance of goods or services.
- Work with local counsel early
- Local lawyers know how Enforcement Offices and courts work in practice.
- They can quickly start enforcement, seek provisional attachment and manage deadlines.
- Early advice often leads to faster settlements and lower overall cost.
Conclusion
Debt collection in Turkey is a structured process with clear legal tools available to foreign companies. By combining:
- A correct legal analysis of the claim,
- Timely enforcement proceedings,
- Strategic use of provisional measures, and
- Strong contractual and evidential groundwork,
foreign creditors can significantly increase their chances of recovering unpaid debts from Turkish debtors. The key is to act promptly, rely on solid documentation and cooperate with experienced local counsel.
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