Practice Areas
Enforcement and Bankruptcy Law Advisory
Legal support under the Enforcement and Bankruptcy Law to help creditors collect debts and to protect debtors' rights.
Last updated: · Prepared by: Av. Barış Kaymaz
Enforcement and bankruptcy law governs a creditor's ability to collect debts through state enforcement mechanisms and the bankruptcy of merchants unable to meet their obligations, primarily under the Enforcement and Bankruptcy Law No. 2004.
Enforcement proceedings are subject to strict formal and time requirements; failing to observe them can delay a creditor's recovery or expose a debtor to an unwarranted enforcement action, making correct execution from the outset essential.
Enforcement With and Without a Court Judgment
In enforcement without a court judgment, a creditor may initiate proceedings for a monetary or security claim directly through the enforcement office even without holding a court judgment; if the debtor does not object to the payment order within seven days, the proceeding becomes final, while an objection halts it and requires the creditor to seek annulment or removal of the objection. Enforcement based on a court judgment, a negotiable instrument, or an enforcement order proceeds differently — the debtor's objection does not halt it, and the debtor may only stop it on the limited grounds that justify postponing enforcement.
Seizure and Sale Procedures
Once enforcement becomes final, the creditor may request seizure of the debtor's salary, bank accounts, and movable or immovable property; seized assets are sold at public auction and the proceeds distributed to creditors in order of priority. The law protects a portion of the debtor's salary and certain essential assets from seizure to safeguard the debtor's and their family's basic living needs.
Cancellation and Removal of the Debtor's Objection
If a debtor objects to a payment order, enforcement is suspended; a creditor who considers the objection unjustified may file an annulment-of-objection action in the general courts within one year of notification of the objection, or, where the claim is based on certain documents, apply for removal of the objection before the enforcement court, a faster but more limited remedy. A creditor who succeeds in an annulment-of-objection action may also be awarded a statutory penalty for the debtor's unjustified objection.
Bankruptcy and Concordat
Bankruptcy is the process of liquidating an insolvent merchant's assets for distribution among creditors, initiated either alongside ordinary enforcement or directly. Concordat allows a debtor unable to pay debts as they fall due, or at risk of such difficulty, to restructure its debts by agreement with creditors under court supervision, with the court granting temporary and definitive moratorium periods that protect the debtor from enforcement while a restructuring plan is prepared and submitted for creditor approval.
Negative Declaratory and Recovery Actions
A person who disputes owing a debt may, before or during enforcement proceedings against them, file a negative declaratory action to establish that no debt exists. A debtor who is forced to pay during enforcement but later proves the debt did not exist may file a restitution action to recover the amount paid.
| Criterion | Without Judgment | With Judgment |
|---|---|---|
| Basis | No court judgment required | Court judgment, negotiable instrument or writ |
| Objection Period | 7 days | Limited grounds to stay enforcement |
| Effect of Objection | Automatically halts the proceeding | Does not halt the proceeding |
Services in This Area
- Initiating and managing enforcement proceedings, with and without a judgment
- Handling cancellation and removal of objection lawsuits
- Advising creditors or debtors on seizure and sale procedures
- Handling negative declaratory and recovery actions
- Preparing concordat applications and restructuring projects
- Handling bankruptcy proceedings and bankruptcy estate matters
- Managing enforcement proceedings based on negotiable instruments