Debt Collection in Turkey

Practical Guide

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Is there a minimum amount to start a proceeding?

No minimum amount is required to initiate legal proceedings for debt recovery in Turkey.

There are several set fees and expenses which needs to be paid by the Creditor to start a debt collection proceeding.

The proportion of legal fees and expenses are higher for small claims in terms of value for money as there are minimum opening rates for lawyers’ fees and court fees below TRY15.000 (roughly €2.000).

Will the amount due condition the type of procedure?

Amount due is not the key parameter to determine the type of procedure. There are a couple of options to start the process irrelevant from the amount due.

The first and faster option is to send a warning letter to the debtor and ask the debtor to pay the outstanding amount. This option is feasible when the debtor does not contest the debt and amicable solution is expectable.

The second option is to initiate an execution proceeding via bailiff office in Turkey against the debtor. Debtor challenging the order results in creditor to file a law suit in the court to lift the challenge.

The third is to file a lawsuit against the debtor.

The court process is subject to pre-condition of mediation prior to filing the law suit.

One of these options can be freely chosen by the Creditor regardless of the outstanding amount.

Is it mandatory to send a warning letter before taking a legal action to collect debt?

Sending a warning letter is not mandatory to initiate the legal proceeding in Turkey, yet highly recommended.

Warning letter has crucial role in cases when there is a question mark if the debtor is in default or not. Furthermore, it is also recommended since delivery of the warning letter by debtor, puts debtor in default. Thus, interest amount can be claimed from delivery date of warning letter.

What are the best practices for creditors to increase the possibility of recovering a debt?

Evidencing the claim is very important and Turkish Law is quite formalistic in terms of book keeping. The company books of the creditor must support the claim of the creditor.

The claimant should retain all documents showing the Business relationship between Creditor and Debtor; commercial communications are a strong evidence in proving the claim and recovering a debt:

  • all correspondences showing the offer, consideration and acceptance, namely proforma invoices, bank receipts, swift documents, letter of credit, debtor’s written confirmation of receipt of the payment, goods or services, written agreements, contracts, packing lists, customs declarations, bill of lading, airway bills;
  • all documents showing the information about the Debtor such as Certificate of Incorporation, signature circulars and company seal of the Debtor in case Debtor is a legal entity etc.
  • official judiciary documents such as court orders, arbitration awards showing the legal grounds of the Creditor’s receivable amount.

Witnesses also can be useful however, most of the commercial cases are held before Panel of Judges of Commercial Courts of the first instance and any amount above 4.480TRY (approximately 600 USD) must be proven by a written documents such as promissory notes or written agreements etc.

It is also worthy to mention that, executing a written agreement before fulfilling the obligations has an important role for debt collection procedures. There are several protective ways to increase recovery of a debt with regard to written agreements.

First and most useful way to ensure a debt recovery is adding a contractual penalty clause into the contract.

Penalty clause can be formulated in different ways in Turkish Law:

  • If the contract is not executed at all or duly executed, creditor has right to request the recovery of the debt or the payment of the penalty fee. However, it is recommended to formulate the clause which enables to request both debt amount and penalty fee.
  • If the debt is not executed at the specified place or time, the creditor has right to request both the execution of the performance at the specified place and time and the penalty fee.

For initiating a legal action to collect the penalty amount decided in the contract upon failure to fulfil obligations by the Debtor, only the original copy of the contract is needed to submit the court. Any other evidences are required by the courts.

It is also needed to be emphasized that contracts must be signed by a legal representative of the debtor if it is a corporate entity. The contracts signed by a person other than the legal representative are usually deemed as invalid by the Turkish courts.

It is highly recommended to consult a Turkish Attorney to find out whether the contract is duly signed or not.

How can a foreign creditor start a procedure for international debt collection in Turkey?

In order for a foreign creditor to start a procedure for debt collection in Turkey, he must deposit a security payment unless there is a reciprocity agreement between Turkey and the creditor’s country. After the security payment deposited, creditor can start the proceeding.

In Turkish Enforcement and Bankruptcy and Civil Procedural Law, it is not obligatory to be represented by an Attorney to start enforcement action before Bailiff’s Offices and lawsuit before a court.

Each individual and foreigner has right to follow up his or her case by himself or herself. However, being represented by a local attorney is highly recommended considering the procedural rules, language, and fulfilling the orders of the judges during the litigation within the specific period.

To engage with a Turkish Attorney for debt collection, a duly issued Power of Attorney must be provided to Attorney. PoA issued in a foreign country (State of Origin) is subject to Notarization and Legalization. Legalization is usually fulfilled via apostille or approval by Turkish embassy or by Turkish Consulate General in the State of Origin. To produce (to submit) the PoA in Turkey, it must be first translated into Turkish by a certified sworn translator and then be notarized. Formulation of the PoA is provided to Creditor by the Attorney.

What types of legal action are available to collect a debt in Turkey?

Enforcement Action

There are two main types of Enforcement Action through Bailiff’s Office in Turkey: Enforcement action without judgement and Enforcement action with judgement.

  • To initiate an Enforcement Action without judgement, enforcement request and payment order do not need to refer an evidencing document. Yet, it is a must to mention the source of the debt and advisable to have all evidencing documents for Debtor’s further challenges against the payment order. 
  • To initiate an Enforcement Action with judgement, enforcement request and payment order are needed to be accompanied by a legally binding judicial decision or order such as decision of a Turkish Court, a Turkish Arbitration Board award, or a foreign Arbitration Board’s award or a foreign court decision which is fully recognized by a Turkish Court.

Enforcement request and payment order are needed to be prepared pursuant to specific formulation set by Turkish Laws. Thus, it is recommended to consult an Attorney for preparing them.


To start litigation before a Turkish court, all evidencing documents must be translated into Turkish by a Certified Sworn Translator and be notarized in Turkey before submitting them to Court.

Petition along with the evidencing documents must be submitted to relevant court, and all court fees and expenses must be paid to court’s cash desk before starting a lawsuit against the Debtor in Turkey.

In the law suit option, mediation process is an important step in the procedure.

Recovery of debts arising from a commercial relation is subject to mediation process in the pre-litigation phase. To start a mediation process, a request petition indicating the dispute and debt amount with all evidencing documents must be submitted to the Mediation Bureaus at the courthouses.

The Mediation Bureau will appoint a Mediator to solve the dispute in an amicable way before starting a lawsuit; the Mediator will invite parties twice to negotiate, if the dispute is not settled in the mediation process, than litigation must be started within two weeks starting from the date of final mediation minutes indicating no settlement is reached by the parties.

Which documents are necessary for a legal action of debt collection in Turkey?

It is not a must to submit a document for sending a warning letter yet it is advisable to attach at least a copy of the document showing the debt amount in the dispute, such as written contract, invoice, promissory notes etc.

In Turkey, warning letters should be issued at a Notary Public and be sent through a Notary. The wording of the warning letter must be in Turkish, thus the grounds of the demand and the supporting documents in a foreign language must be translated into Turkish by a certified sworn translator.

For initiating an enforcement action without judgement, the applicant should submit the enforcement request, the payment order, the bank receipts showing the Creditor paid the fees and expenses. Submitting the evidencing documents is not obligatory but recommended in case of debtor’s further challenges to the payment order.

For initiating an enforcement action with judgement, an approved and legalized copy of a judgement must be submitted to Bailiff’s Office apart from submitting the enforcement request, payment order and bank receipts showing the Creditor paid the fees and expenses.

If the creditor is represented by an attorney, the PoA must also be submitted to Bailiff’s Office to start the action.

For initiating a lawsuit against the Debtor, petition, duly notarized, apostilled, or legalized evidencing documents, bank receipts showing the Creditor paid the fees and expenses must be submitted to the court.

During the litigation, the Judge may require additional documents.

If the creditor is represented by an attorney, the PoA must also be submitted to the Court to start the litigation.

What happens after the first demand for payment?

If the debtor does not raise a challenge the payment order becomes due and can be executed by the bailiff office. Remaining silent will be deemed as acceptance.

Under Turkish law, a debtor can challenge the payment order by submitting an objection petition to the bailiff office. The term for filing the objection can be from 5 to 7 days depending on the nature of the debt. Upon the submission of the defences and objection, the process will be ceased and be pending until the creditor starts further court process in Turkey.

Once a debtor places objection against a payment order, the Creditor can file a lawsuit for cancellation of the objection. This legal action i.e. “cancellation of the Debtor’s objection or lifting the Debtor’s challenge”, usually takes 12 to 20 months to be finalized. The commercial records, commercial books of the parties, correspondence and notices between the parties and etc. shall be reviewed by the court during the course of the litigation.

In both cases there is some common procedure to be followed, such as notices, seizure, and liquidation of assets etc.

The court shall at its sole and absolute discretion will make a decision. If the objection of the defendant / debtor is in bad faith, the court may impose an extra fine as 20% of the claim in dispute in addition to the interest to be applied.

Following the finalization of the court case the creditor can continue the debt collection process against the debtor. Now it is an undisputed matter as the court has made a decision about it.

If the debtor has money in the bank accounts, then the funds will be released and transferred to the account of the bailiff office to be paid to the creditor. If the money is not enough or there is no money at all then the assets will be liquidated in due course of the proceedings.

Can interim measures be taken?

Provisional seizure is commonly used as an interim measure to ensure the recovery of debt by the Creditor. Interim measures are only issued by courts. It is a temporary legal protection that allows the debtor's assets to be seized by court decision to secure the outcome of the current or future proceedings regarding recovery of debts.

To make the request for the provisional seizure, the creditor must deposit a security payment depending on the decision of the court and this may be from 15% to 115% of the claim in dispute.

Within ten days from the date of the provisional seizure decision of the court, the creditor must request the execution of the provisional seizure decision. If the creditor does not request the execution of it within ten days, the provisional seizure decision is automatically lifted and cannot be enforced later.

The execution of the provisional seizure decision must be requested from the bailiff’s office within the same jurisdictional area of the court that made the provisional seizure decision.

By execution of the provisional seizure, debtor loses the right to transfer assets or credits to 3rd parties thus Creditor increases the possibility of the debt recovery.

If, for any reason, recovery was not possible, is there any other action that the creditor could take to write off such debt in its accountancy?

In case the recovery was unsuccessful because of insolvency of the debtor, the creditor may obtain a proof of insolvency. This certificate of insolvency is issued by the competent enforcement office after all possible steps of collection process are exhausted.

For Turkish tax residents, Turkish Tax Procedural Law numbered 213 allows that unrecovered debts can be written off. For other countries writing off rules should be considered according to local legislation.

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