Debt Collection Procedure for Foreigners in Turkey
At which court can a foreign national start a legal procedure to collect its receivable from a Turkish debtor?
In the event that the parties have agreed that the court and execution office of the foreign country shall have jurisdiction in case of a dispute between them, debt collection proceedings can be initiated in that foreign country. However, our lawyers advise against this as the foreign judgment must be recognized and enforced by Turkish courts in accordance with Private International Law and Procedural Law (Law No. 5718), which can be a lengthy process. In the absence of such an agreement, the general rule is that the court and execution offices of the country where the defendant is located have jurisdiction, in this case, the Turkish court and execution offices.
How can a foreign national collect its receivable from a debtor in Turkey?
A foreign national who has deposited a security amount in accordance with article 48 of Law No. 5718, as well as those who are exempt from depositing a security amount, can initiate enforcement proceedings to collect their receivables from a debtor in Turkey. The debt collection process in Turkey typically begins with an extrajudicial phase, in which court intervention is avoided. Our lawyers will contact the Turkish debtor to negotiate payment. During the extrajudicial phase, options include negotiating payment arrangements, sending demand letters, making phone calls, and announcing legal proceedings. If the extrajudicial phase is unsuccessful, there are still two ways to collect the debt. Firstly, a foreigner may initiate litigation procedures by filing a debt action before local courts. Secondly, and most commonly used in Turkey, is to initiate executive enforcement proceedings before execution offices in Turkey. If you want to know more about the debt collection process in Turkey, please check our article “Debt Collection in Turkey for Foreign Creditors” for more information.
Due to the complexity of the Turkish jurisdiction for debt collection, it is strongly advised for foreign entities and individuals to retain the services of lawyers who are familiar with the procedures within Turkey to pursue and collect the debt owed to them. At Turkish Legal Office, we have a team of English, Dutch, German speaking attorneys with extensive knowledge of the debt collection procedures in Turkey.
Contact us today for a free consultation.