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Debt collection procedure is not a well-known field of activity in Turkey. Therefore, Turkish market is newly introduced to the establishment of debt collection agencies. Although the legal statue of debt collection agencies is not arranged by any special regulation, their activity field is not lack of any order. They are bound to Code of Obligations, Code of Commerce and Bankruptcy Law. They should also respect all the regulations concerning the debt collection procedure. The absence of a regulation concerning debt collection agencies does not refer to liberty of activity.

Debt collection agencies could also resort to court through their lawyers.

Apart from the debt collection agencies, a lot of law offices are active in the same field too, but the means used by the lawyers and debt collectors are different. Lawyers are orientated more towards to the official legal procedure and are not familiar with all means of setting a claim out of court. A debt collection agency is orientated to amicable settlement of the arisen dispute and tries through consensual allowances to solve it by keeping the business relations between the creditor and the debtor.

The relations between the agencies and their clients are usually regulated by a contract, which regulates all the issues concerning the collection.Debt collection procedure in Turkey is generally pretty straight forward and consists roughly of two sections:

  1. An amicable settlement or out of court agreement;
  2. Court procedure, which can take place before:
    – the relevant state courts or
    – the court arbitration

Pre Legal Procedure

The first section consists of concluding an out of court agreement for volunteer execution and payment of the appropriate and stipulated debt on mutual basis.

The agency first registers the file and confirms registration to the client. The day the claim is received a written demand letter is sent to the debtor. The first demand for payment contains a detailed statement of the amount due, including costs and interest/default as provided under the commercial deal.

Following the written statement of the debtor to the demand letter or lack of such statement, contact with the debtor is made by phone and meeting is arranged in order an amicable settlement to be reached.

The results of the above mentioned steps could be:

–         payment in full,

–         partial payment,

–         payment in installments,

–         settlement proposal of debt is disputed.

That part of legal actions includes contracting the debtor and preliminary negotiations before signing a settlement between the parties. The agreement will settle all the details if the execution (i.e. if it will be an execution in several installments or complete, term, etc.) liability and actions in case or non execution. In case of non execution it could be arranged, that either a Court or Arbitration or a Turkish Civil Court follows the process.

In case of an agreement, which says that the debt should be paid in installments, we recommend that the execution should not only be prepared but also observed by a debt collection agency in order to ensure that the debtor abides his proposal.

If the proposal of the debtor is unacceptable for the creditor, the collection procedure continues. Generally most debtors try to get out of the procedure through amicable settlement.

After 6 to 8 weeks we provide our clients with the results of our work and a recommendation how to go on afterwards. If our endeavors for an amicable settlement have had no success and we have the clear order of the creditor legal proceedings are initiated.

To make sure whether or not a legal procedure will be successful, it is advisable to undertake a feasibility study. Therefore, in order to determine the chances of success, the creditor is advised to have a solvency investigation carried out. Perhaps the debtor is, for finical reasons, not able to pay of his debt or he might have practiced fraud to hide his financial obligations. The results of this investigation are outlined in a report and combined with an advice that should help the creditor with his decision whether to start the legal procedure or the case ought to be closed.

The creditor is usually requested for a power of attorney, which is, according to Turkish law, necessary to act on behalf of the creditor. Actually the power of attorney is only needed during the legal procedure. However, also outside the court the lawyer is more influential having a power of attorney. In case the debtors address is unknown it could be found out through investigation, in which a solvency investigation is included automatically.


According to the Turkish law interest may be either conventional or legal.

Legal interest is the one arranged by law. For example the debtor is liable for compensation to the amount of the legal interest due from the day of delay. The legal interest is determined by the Central Bank of the Republic of Turkey.

Regarding the conventional interest in Turkey one has to differ between civil and commercial contracts.

In a civil contract conventional interest is just to be owed if it was preliminary agreed in written form. However, if both concert parties are merchants conventional interest is always owed also if it is not mentioned in the contract.

According to the Turkish civil law accumulation of past interest is forbidden. On the other side the Turkish law does not only allow such kind of accumulation but in many cases it is like a rule. This forfeit serves as compensation for the damage resulting from default and on the other hand it also secures the execution of the obligation. We have to point out that interest could not be added to the forfeit. For non execution you either owe forfeit or interest.

Legal Procedure

All persons can become a part in front of Civil Court which means actions can be held in their names or against them. Apart from the cases envisaged by law, nobody may represent others rights in front of Civil Court. That means in front of the Court the parties could be represented by themselves. Of course, that rule applies only for capacitated persons who may perform on their own all legal actions. Legal persons shall be represented in front of court according to their constitution or other statutory documents.

Besides the above rule, only lawyers can be authorized to pursue claims against debtors at court. A power of attorney has to be signed duly by the claimant before the lawyer can take part in court.

In Turkey there is a two instance court system. A debt collection that reached the court passes the following procedure:

Court Procedure – First Instance

If an amicable settlement could not be reached, the only way of solving the problem is to submit a claim to the relevant state court. This is the second part of the debt collection procedure. The court in whose region the respondent resides shall hold the case.

Claims should be written in Turkish and have to contain:

  1. indication of the court
  2. name and address of the claimant and the defendant, their legal representatives or attorneys as well as the unified civil number of the claimant and fax number
  3. the amount of the claim
  4. setting forth the circumstances on which the claim is based
  5. the content of the demand
  6. signature of the applier

The plaintiff shall state proof all of it and write a request referring to the circumstances under which the claim occurred.

The claim request shall also contain:

  1. the power of attorney, if it is submitted by an agent of attorney
  2. the public taxes and costs
  3. copies of the request and the appendixes for all respondents

If the claim does not satisfy the above mentioned conditions a note is sent to the plaintiff in order to remove the irregularities in a certain time. If that does not happen the claim and the appendixes are returned to him. The correct claim is considered to be regular from the date of its entering.

When the case requires the presentation of documents the party may present an official copy of the documents, but in all such cases when instructed by the court to present the original, the letter also be obligated. If the party fails to do as instructed, the copy presented shall be struck by the court as evidence in the litigation.

A copy of the written claim of action along with copies of all relevant documents shall be handed to the claimant together with the summons for the initial hearing. In Turkey there are two instance court systems and a debt collection, which reached the court, passes the following procedure:

Procedure in front of the court of cassation-second instance

After the judgment of the first instance court the parties have 15 days to appeal against the court decision. If one party appeal against the court decision makes a petition and pays the legal charges of the appeal court, it is sent to the Court of Cassation. Time limit for this instance is approximately 6 months. The decision of this court usually is the last one and could not be appealed.

Arbitration Court

Section two of the debt collection procedure can also be solved by Arbitration Court if an arbitration agreement was made before. That means if the court is preliminary negotiated and that the solution of eventual legal argument is put under arbitration clause. The arbitration agreement is a relative procedure precondition.

If there is an arbitration agreement, under several conditions the parties do not lose their right to claim in front of a Public Court. The claim could be examined by the Public courts according to the general rules of the Turkish Civil Procedure Code. The Turkish Public Court, which is approached with claim about an argument being subject of an arbitration clause, examines the claim if the defendant does not base the argument on that arbitration clause. The defendant is able to do this until the end of the first court hearing. Is the defendant does not use the right, it will vanish the Turkish Public Court continues the examination of the legal argument. If the defendant relays on an arbitration clause, the Public Court is obliged to stop the trial.

The opposite situation is possible too. If there is no arbitration agreement, the parties do not lose their right to submit a claim to the Arbitration Court. Even after the dispute arises only signing a written agreement would be enough to do so. The only one condition to claim at Arbitration Court is the defendant with written or oral application to be examined by the Arbitration Court.If the defendant calls the competency or the Arbitration Court in question, the court is obliged to discontinue the trial.

Seizure Proceeding

In every status of the trial the plaintiff could ask the court for the allowance to ensure the claim. In that case the court can make the plaintiff represent a guaranty in money or in property at a rate determined by it, if the claim is supported with good written proves.

The court may allow a seizure or the claim for it is full amount or only for those parts, which it considers sufficiently supported by proves.

The seizure is made:

  1. by imposing an interdict upon immovable property
  2. by restraint of movable properties and receipts of the debtor
  3. by blocking of all available bank accounts

If the claim, upon which the seizure is allowed, is rejected or is not brought in the term given to the plaintiff, or if the case is terminated, the defendant can claim from the plaintiff to pay him the damages caused as a result of the seizure.

Execution Procedure

To start an execution procedure, the court should take its decision and the debtor doesn’t have the chance to object it anymore. That means the court decision will be legally enforced. The lawyer requests the Court to issue a special document execution list, which is a base on which the lawyer asks the Court of execution to start an execution procedure against the possessions of the debtor. To ensure this procedure, usually at the beginning of the court procedure, the lawyer ensures the claim by blocking the assets of the debtor.

Although this description of the legal procedure has been written with the utmost care, no rights can be derived from it.


Bankruptcy proceedings shall be aimed at providing fair satisfaction of creditors and opportunities for reorganization of debtors enterprise. Bankruptcy proceedings shall take into consideration the interests of the creditors, the debtor and his employees.

Bankruptcy proceedings shall be instituted for merchants who are insolvent. Besides insolvency the bankruptcy shall be instituted due to over indebtedness of a limited liability company, joint stock company and public limited partnership.

Insolvent shall be deemed merchants who are unable to perform due and established on grounds money obligation at the moment of phases of considering the request for opening the bankruptcy proceedings the under a commercial transaction or public obligation to the state and municipalities related to their commercial activity. Insolvency shall be presumed where the debtor has discontinued the payments.

All obligations of the debtor in cash or in kind shall be considered due as from the date of ruling for declaration of bankruptcy. Obligations in kind shall be transformed into obligations in cash at the respective market value as of the date of the opening the bankruptcy proceedings.

Bankruptcy proceedings shall be instituted pursuant to an application in writing submitted to the court by the debtor, respectively the liquidator or the creditors under a commercial transaction, as well as under public obligation to the state and municipalities related to the commercial activity of the debtor.

Costs of legal collection

In every court procedure the client has to pay the fees for opening the case in front of the court. These fees are established by the Ministry of Justice and they are variable according to the amount that was claimed.Beside those fees the client has to pay the lawyer fees that are on a case per case basis.Those fees will be established after the conversation between the client and his lawyer.

If the plaintiff wins all the court expenses, legal costs have to be paid back to the plaintiff by the defendant.


The duration of the procedure depends naturally on the course of it. If an agreement is reached, it is generally just a matter of weeks. If the whole procedure is passed through and the debtor does not object, it all takes about 1 year on first instance. If the debtor does object, a further 6 to 12 months can be added for the second instance. If the maximum time allowed for all possible appeals during the course of the procedure is taken into consideration, it can take several years. The latter is however very exceptional.

State of limitation

All claims for which the Law does not provide some other term lapse after a period of limitation of 10 years, the following is affected by extinction after a period of limitation of 1 year:

  1. Claims for labor remuneration for which no other period of limitation has been provided,
  2. Claims for deliveries and from retail sale,
  3. Claims for rent, interest and other periodic payments,
  4. Claims against the state and against state enterprises, with the exception of those arising from torts.

An agreement for shortening or extending the established periods of limitation, as well as the waiver of limitation before its expiry, is invalid.

The period of limitation begins on the day on which the claim has become executable. If stipulated that the claim becomes executable after invitation, the period of limitation begins from the day on which the obligation has arisen.

There is no period of limitation for the duration of the legal proceedings related to the claim.

The period of limitation is interrupted:

  1. With the admission by the debtor of the claim,
  2. With the presentation of claim or plea, or by a request to initiate conciliation proceedings; if the claim or plea, or the request for initiating conciliation proceedings are not granted. The period of limitation is not deemed to have been interrupted,
  3. By taking action to implement a writ of execution.

A new period of limitation begins after the interruption.

When the claim has been established by court judgment, the new period of limitation is always 10 years, with the exception of claims against the state and against state organizations.

If the debtor executes his obligation after the expiry of the period of limitation, he is not entitled to get back what has been paid, even if at the moment of payment he may not have known that the period of limitation bad elapsed.

The extinction of the main claim leads to the extinction of all additional claims arising there from, although the period of limitation for them may not have elapsed.

Justus International believes in the highest ethical and professional standards and will provide a great effort to compete the work properly and timely at a fair and reasonable for the quality of services rendered