Debt & Bankruptcy in Turkey

In Turkey, debt is no longer treated as seriously as it perhaps was in years gone by.


It is perfectly socially acceptable to incur debt, and most businesses or individuals have debt of some kind, but people are still very cautious about incurring debt and there is great social disapproval if people do not repay their debts when they are due.

There is a large amount of debt collection and enforcement carried out through the courts.

If you are owed money, or if you have won a court case and the person has not done what the court ordered, you will make an application to the Enforcement Department.

If you have an existing court order

You can go directly to the enforcement process. See below.

If you have no court order but ‘valuable paper proof of debt’

If you have valuable paper proof of the debt (for example, a bounced cheque or a written acknowledgement of the debt), there is an accelerated process by which you can proceed to enforcement.

Non-payment of a cheque has been a criminal offence since August 2016.

If you have a debt claim without a paper acknowledgement of debt

These are, typically, unpaid invoices. These are treated as an ordinary debt, you can still proceed to enforcement but the process will be more challenging than in the case of a debt with valuable paper proof.

You can also resolve such cases through the civil courts. Once you’ve obtained a court order confirming that the money is due to you, you proceed to the enforcement operation.

Your lawyer will advise which is likely to be better/cheaper/faster in your case.

Enforcement operation

When enforcement proceedings are started, the Enforcement Court will issue a summons to the debtor and ask for the debt to be paid. The debtor has five, seven or 30 days (depending on the type of the debt) in which to reply to this summons.

If she does not reply, or if the Department of Enforcement decides that her objection to payment has no legal validity, the Court will decide how to collect the debt.

For money debts, the basic remedy is to seize assets (a car, a boat, a house, the debtor’s entitlement to salary, the balance in his bank account etc.) and then, if necessary, sell them by auction. The auction is arranged by the Enforcement Department.

For obligations that cannot be measured in cash (such as surrendering possession of a building or handing over a child to the other parent), the Enforcement Department is entitled to use force.

How long does this take?

The time will vary dramatically.

How much does it cost?

A fee will be payable to the Department of Enforcement. For money debts, this is typically 4.5-9% of the amount claimed.

In addition, you will incur the fees of any lawyer that you appoint to deal with the case. These will not be recoverable.


Turkey is unusual in that only businesses can be made bankrupt and, by doing so, relieved of their debts. An individual person cannot seek relief from debt: the debt will follow them forever.

If a business is unable to pay its debt, it can be made bankrupt.

They can either apply for their own bankruptcy or someone who is owed money can apply for them to be made bankrupt compulsorily. The application is made to the Commercial Court. Bankruptcy proceedings are normally quite quick.

Last year (2016) there were 12,000 companies declared bankrupt in Turkey.

The effect of bankruptcy

Once an application has been made then, unless the sum claimed is paid or the debtor can show a good legal reason for non-payment, a bankruptcy order will be made. The result of such an order is that the court appoints a lawyer as the company’s bankruptcy administrator.

The bankruptcy administrator takes control of all of the business’ assets and either sells them or allocates them directly to the creditor.

Recovery rates

Recovery rates on a bankruptcy in Turkey are low. By the time things get this far, most people will lose their money.

Alternatives to bankruptcy

Turkey has an arrangement whereby a business in financial difficulty can apply to be placed in protective measures. This is called ‘Postponement of Bankruptcy’ and is similar to the concept of Chapter 11 in the United States. If the application is granted, nobody will be able to take enforcement proceedings against the company for a period of one year. That period can be extended up to a maximum of four years.

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