Enforcement & Bankruptcy Law
Advisory and representation are provided in enforcement proceedings with and without judgment, proceedings specific to negotiable instruments, attachment procedures, and bankruptcy and concordat processes.
The interests of both creditors and debtors are taken into account; enforcement-related disputes, including objections, negative declaratory actions and restitution claims, are handled.
Services in This Area
- Initiation and conduct of enforcement proceedings with and without judgment
- Enforcement proceedings specific to negotiable instruments (cheques, promissory notes, bills of exchange)
- Objections to payment orders, actions for annulment of objection and removal of objection
- Advice and representation in negative declaratory and restitution actions
- Attachment, preservation and sale procedures, and the pursuit of third-party ownership claims
- Legal support for debtors in payment plans and debt restructuring processes
- Bankruptcy actions and the registration of claims with the bankruptcy estate
- Concordat (composition with creditors) applications and the conduct of moratorium processes
How Are Enforcement Proceedings Initiated and Conducted?
Under the Enforcement and Bankruptcy Law (İİK), a creditor holding a court judgment may pursue enforcement with judgment, while other claims may be pursued through enforcement without judgment; a special track exists for claims based on negotiable instruments such as cheques, promissory notes and bills of exchange. Proceedings begin with an enforcement request filed with the enforcement office, after which a payment order is served on the debtor.
If the debtor neither pays nor objects within the prescribed period, the proceedings become final; the debtor's salary, bank accounts, movable and immovable assets may then be attached, and attached assets are sold to satisfy the claim. As every step is subject to strict deadlines, the timetable must be followed carefully by creditors and debtors alike.
Objecting to a Payment Order and Enforcement-Related Actions
In general enforcement without judgment, the debtor may halt the proceedings by objecting within seven days of service of the payment order; in proceedings specific to negotiable instruments, the objection period is five days and an objection does not, as a rule, suspend enforcement steps other than the sale. Upon objection, the creditor may bring an action for annulment of the objection or, where one of the documents listed in the İİK is available, request the enforcement court to remove the objection.
A party who considers that no debt exists may bring a negative declaratory action before or during the proceedings to establish the absence of the debt; where payment has already been made, restitution may be sought through a recovery action. Because compensation may be awarded against the unsuccessful party, these actions should be assessed carefully before being filed.
When Do Bankruptcy and Concordat Come into Play?
Bankruptcy is a collective enforcement route applied, as a rule, to merchants, providing for the liquidation of all of the debtor's attachable assets. Creditors may pursue enforcement through bankruptcy or file a direct bankruptcy action; once bankruptcy is opened, claims are registered with the bankruptcy estate and the liquidation is conducted by the bankruptcy administration.
Concordat, by contrast, allows debtors in financial distress but with prospects of recovery to restructure their debts under court supervision. During the provisional and definitive moratorium periods, enforcement proceedings against the debtor are as a rule suspended; the process may conclude with creditor approval and court ratification of a project prepared under the supervision of a commissioner. It is important for both creditors and debtors to understand their rights in these processes.
Frequently Asked Questions
- What is the deadline for objecting to a payment order?
- In general enforcement without judgment, the objection period is seven days from service of the payment order, and a timely objection halts the proceedings. In proceedings specific to negotiable instruments, the objection period is five days and the objection is filed with the enforcement court. Since missing these deadlines causes the proceedings to become final, a legal assessment is advisable as soon as the notification is received.
- How much of a salary can be attached?
- Under the Enforcement and Bankruptcy Law, as a rule no more than one quarter of the debtor's salary or wages may be attached, with the portion necessary for the subsistence of the debtor and their family protected. Exceptions apply to maintenance (alimony) claims, and multiple attachments are placed in order of priority. The actual application may vary depending on the debtor's income situation.
- Enforcement proceedings were started against me for a debt I do not owe — what can I do?
- If a payment order has been served, the proceedings can be halted by objecting within the prescribed period; where the objection period has been missed, or a definitive finding on the merits is sought, a negative declaratory action may be considered. If payment has had to be made, recovery may be sought through a restitution action. The appropriate route depends on the type and stage of the proceedings.
- How can I collect my receivable from a company that has declared concordat?
- During the concordat moratorium, new enforcement proceedings against the debtor are as a rule barred and existing ones are suspended. Creditors must register their claims with the commissioner within the prescribed period and exercise their rights by participating in the creditors' meeting. If the project is ratified, claims are paid according to its terms; close monitoring of the process prevents loss of rights.
These answers are for general information only and do not constitute legal advice. For an assessment of your specific situation, please consult a lawyer.
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