Enforcement Law is the subdivision of law that is subject to reimbursing the debt of the insolvent debtor by state authority through confiscating debtor’s movable and immovable assets on account of the application of debtee. This law field has been settled with the Enforcement and Bankruptcy Law numbered 2004.
Enforcement Proceeding With and Without Judgement
Proceeding in enforcement law defines the procedures executed to reimburse the debt of debtor by means of state authority. Debtee having unrecovered debt can choose any one of the two different proceeding practices as proceeding with and without judgement. In proceeding with judgement, first of all a proceeding is obtained from the court and then the procedures particular to this method are pursued. In proceeding without judgement however, debtee does not have any proceeding obtained from the court. Debtee obtains a payment order to debtor that has not paid his/her debt by applying directly to the authorized enforcement office. Proceeding without judgement has also been called as proceeding through ordinary confiscation.
Authorized Enforcement Office
The authorized enforcement office is where the debtee shall start and carry on his/her enforcement proceeding among the enforcement offices in different places. In proceedings with judgement, debtee can apply to any enforcement office in the boundaries of Turkey thereunder Enforcement and Bankruptcy Law Art. 34. Regarding monetary and collateral debts related proceedings without judgement, Enforcement and Bankruptcy Law (EBL) Art. 50/1 gives a reference to Code of Civil Procedure (CCP) numbered 6100 on the authority issue. According to the said code “provisions on authority is applied by means of comparison. In so far, the enforcement office where the contract that is a basis to the proceeding has been settled is also authorized to proceeding.” Accordingly, regarding monetary and collateral debts related proceedings without judgement thereunder CCP Art. 6 the enforcement office where the debtor’s residential adress is, if the monetary debt has been arose from a contract thereunder EBL Art. 50/1; thereunder CCP Art. 10 enforcement office that is in the place where the contract has been settled or where it will be executed is authorized. Since the monetary debts are movable type of debts, the place where the contract will be executed shall be the residential address of debtee.
Request to Issue Enforcement Proceeding
Request to issue enforcement proceeding shall be made to enforcement office either verbally, written or electronically and the content of the request consists of the following:
- Name and surname of the debtee and his/her legal representative if any; bank name where the payment shall be made in the name of the debtee or his/her representative and the account information; Republic of Turkey identity number or tax identification number if any; title and residual place; if the debtee is living abroad the residual place in Turkey that he/she shall report,
- Name and surname of the debtor and his/her legal representative if any; debtor’s identity number of the Republic of Turkey or tax identification number if it is known by the debtee; title and residual place,
- For requests against a succession, name, surname, identity number or tax identification number of the Republic of Turkey if it is known, title and residual place of successors to whom a notice shall be sent,
- Amount of the debt or assurance demanded in Turkish Lira and for debts with interest, amount of interest and the starting date of the interest charging, if the debt or assurance is in a foreign currency, the conversion date to be used for exchange rate calculation and its interest,
- If the debt is based on a bond, submission of the original or a copy stating date and number of it.
- Declaration of which proceeding type has been chosen (confiscation or bankruptcy),
- Signature of the debtee or his/her representative and date.
After the debtee’s application to authorized enforcement office then the bailiff writes out a payment order thereunder EBL Art. 60 if he/she decides that the application is compliant with the conditions set out in the Law. Payment order consists of the following statements: debt together with the charges shall be paid to the bank account of the enforcement office written in the payment order in seven days; if the debt is a liability of providing an indemnity, a warning to provide the indemnity in this time period; if the signature on the bond which the proceeding is based on is not the signature of the debtor, this aspect shall be proclaimed thereto and clearly also in this time period of seven days, otherwise the bond is deemed to belong to the debtor at execution proceeding, if the debtor objects the signature on the bond he/she shall attend to the trial at the enforcement court, otherwise the court will adjudge to cancellation of the objection; if the debtor objects to the entire debt or some part of it or debtee’s right for execution proceeding, a warning to declare the objection in the same time period, if the debtor does not proclaim objection to the bond or debt in this seven days, he/she shall declare property thereunder EBL Art. 74, and if he/she does not make declaration, he/she will be sentenced prison; if the debtor does not declare property or makes a declaration contrary to facts, a warning to be sentenced prison further and if the debt is not paid or objected enforcement will be proceeded.
As a principle, notification to payment order is served personally to the addressee. However, in exceptional circumstances notification can also be served to the persons legally authorized to accept judicial notification in the name of addressee. When the person to whom the notification to be served is not present in his/her residential address, the notification can be served to adult persons living in that address if it is obvious that this person is not incompetent and to servants working there. Details on notification provisions are regulated in Notification Law numbered 7201.
Debtor that received payment order can proclaim verbal or written objection to the enforcement office by which the proceeding has been issued in seven days thereunder EBL Art. 62/1. Objection can be proclaimed on the authority of the enforcement office, or the debt subject to the proceeding or the signature on the bond if the debt is based on a bond. A duly proclaimed objection holds up execution proceeding thereunder EBL Art. 66/1.
Annulment of Objection
For annulment of objection proclaimed by debtor, debtee can apply to enforcement court in six months to cancel the objection or can sue at general court in one year to terminate the objection under the general provisions by proving existence of the debt. However, if debtee does not have “a bond that counts in debt acknowledgement since the signature on it legitimized through acknowledgement or by notary or a receipt or a voucher that is issued duly by a government agency or a competent authority in scope of its authority” which is stated in EBL Art. 68/1, he/she definitely has to follow the procedure of termination of objection by general court. Otherwise, his/her proclaim for termination of objection will be rejected since he/she will not be able to submit the document specified in the Law to enforcement court. If debtee applies to enforcement court with this document, enforcement court will adjudge one of the following:
- Permanently cancellation of the objection in the case of objection to the debt.
- Temporarily cancellation of the objection in the case of objection to the signature.
- Rejection of proclaim for termination of the objection in the case of objection to the debt or signature.
In the case of objection to the signature, the reason for temporarily cancellation of the objection is that whether the signature belongs to the debtor or not can be determined only through expert examining.
After the application of debtee, if debtor’s proclaim of objection is adjudged by enforcement court or general court as permanently annulment of objection then the payment order will be charged and it will turn into compulsory execution certificate. At the same time, since there is a court order now, started proceeding without judgement turns into proceeding with judgement. Debtor is has to declare property in three days starting at receiving notification on the annulment of objection.
Debtor (or debtee) can complain against the procedures contradictory to provisions of law of executive organs, especially of execution offices. Complaint is filed to the enforcement court to which the execution office is connected in seven days started at the date when he/she find out the procedure of execution office that is in question about being contradictory to provisions of law or not consistent to the case. However, “not performing a right or dragging it out without reason can be complained anytime” thereunder EBL Art. 16/3. Different from objection, complaint does not hold up the proceeding automatically if the enforcement court does not adjudge in this direction. Enforcement court considers the case, then, if it does not determine that the trail is needed, it will adjudge one of the following in ten days:
- Rejects the complaint determining the reason of the complaint is not valid.
- Reverses or alters the realized procedure determining the reason of the complaint is valid.
- Enjoins the execution office to perform the procedures that it has not performed or dragged out without reason if determines the existence of a reason for a complaint unlimited in time.
Enforcement without Judgement
1. (Ordinary) Proceeding through General Confiscation
In proceeding through general confiscation, debtor can proclaim of objection for three reasons:
a. Objection to Authority
Debtor → 7 days → Objection to the Payment Order → Execution Office
b. Objection to Debt
c. Objection to Signature
If debtor proclaims for objection on the basis of one or some of the three reasons listed above and then if the proceeding holds up due to the objection, debtee has two options:
a. Ordinary Bond with Acknowledged Signature
Debtee → Application for Annulment of Objection → 6 months → Enforcement Court
b. Ordinary Bond with Signature Approved by Notary
c. Receipt or Voucher Issued by a Government Agency
Debtee → Action for Annulment of Objection → Can Sue at General Courts → Civil Court of First Instance
- At proceedings without judgement related to rental debts, time for default is 30 days. Although it is possible to apply for annulment of objection before 30 days, evacuation cannot be demanded due to default.
- At annulment of objection related to unjust debt -subject to application- against to debtor, in case of rejection of application for annulment of objection against to debtee, denial indemnity is adjudged at a rate of minimum 20%.
- Late objection is proclaimed to Enforcement Court in 3 days starting from the date at which the restraint is gone away. (EBL Art. 65)
Complaint → 7 days → Enforcement Court → complaints filed thereunder EBL Art. 16/2 is not subject to time limitation. For example, being not specified TL equivalent of a debt in a foreign currency at the date of proceeding contradictory to the EBL Art.58, etc.
2. Proceeding through Confiscation Particular to Bills of Exchange
Bills of exchange, as indicated in TCC Arts. 583., 688. and 692, is composed of bills, notes and checks. Debtee not having a bill, a note or a check only has the right to recover the debt by means of general confiscation. Because, confiscation particular to bills of exchange is a proceeding procedure that can be applied by a debtee whose debt is based on a bill of exchange and who has the bill of exchange.
At confiscation particular to bills of exchange, the payment period is 10 days, different from that of general confiscation. Similarly, the time period to declare property is also 10 days, different from that of general confiscation. Different from general confiscation, objection to debt or signature is proclaimed in 5 days to enforcement court, not to execution office.
At confiscation particular to bills of exchange, debtor can proclaim for objection based on 3 causes:
a. Objection to Authority
Debtor → Objection → 5 days → Enforcement Court
b. Objection to Signature (Expert examining is needed)
c. Objection to Debt (Official document, or a document the signature on that has been acknowledged, or an ordinary document the signature on that has been denied but it is confirmed to belong to debtee after expert examining)
- Objection does not hold up enforcement proceeding except sale. On this subject enforcement court can further adjudge to hold up with a temporary injunction or a definitive sentence
- Acceptance of objection holds up enforcement proceeding.
- Denial indemnity is adjudged against debtor in the case of rejection of objection to debt if debtee’s application also exists.
- 20% denial indemnity is adjudged against debtor in the case of rejection of objection to signature after expert examining even if debtee’s application does not exist. Whatever the reason is, denial indemnity cannot be adjudged against debtee in the case of acceptance of objection to signature even if there is an application.
- In the case of rejection of objection, if the court adjudges to denial indemnity and pecuniary penalty, and if debtor files a negative declaratory or restitution action at general court, collection of the penalty judged will be postponed until these files are concluded.
Complaint can be filed based on 3 causes:
Complaint → 5 days → Enforcement Court → Complaint;
- a. Proceeding Procedure (Claiming the bond on which the proceeding based has not the characteristics of a bill of exchange, complaint regarding proceeding through confiscation particular to bills of exchange cannot be carried out.)
- b. Character of the Bearer (Claiming the debtee is not rightful bearer)
- c. Complaint on Prescription
In this case debtee has two options:
Debtee → 6 months → Annulment of Objection → Enforcement Court
Action for Annulment of Objection → General Courts → Civil Court of First Instance
3. Evacuation of Rented Real Estate through Enforcement Proceeding Without Judgement
It is the only exception that enforcement proceeding without judgement is used just for monetary debts. As a rule, evacuation of rented real estate through enforcement proceeding without judgement can be demanded if one of the following two conditions exist:
- Evacuation of renter due to not paying the rent.
- Evacuation of renter due to expiry of the rent contract
- Evacuation of Renter Due to Not Paying the Rent
According to Code of Obligations, termination of rent contract is not possible if an extension of 6 days for the rents duration of which is less than 6 months, and 30 days for the rents duration of that is equal or more than 6 months is not granted.
Landlord that could not collected the rent starts proceeding and sends payment order to debtor. Different from other confiscation procedures, payment period is 30 days here. In this case renter has two options:
Renter → 7 days → Objection → Execution Office →
a. Objection to Signature
b. Objection to Debt
Renter → 6 months → Annulment of Objection → can sue at General Courts based on two reasons:
- a. Contract set right by notary
- b. Payment of the debt in warning period
- Evacuation of Renter Due to Expiry of the Rent Contract
Evacuation of a real estate through this procedure can only be performed if it is based on a written rent contract. Moreover, the landlord needs to demand for evacuation in 30 days starting from the expiry of the rent contract.
After the demand for evacuation, a release order is sent to renter. If renter does not release and deliver the real estate in 15 days and if he/she does not proclaim for objection in 7 days, compulsory execution is carried out.
a. Deny of the contract
Objection → 7 days → Execution Office →
b. Objection claiming the contract has been renewed.
c. Objection claiming the contract has been enlarged
d. Objection to Signature
ın this case, renter;
Annulment of Objection → 6 months → Enforcement Court
If the bond is an ordinary written bond and renter objects to signature, landlord cannot demand annulment of objection now.
Enforcement with Judgement
As a rule enforcement without judgment is applied to monetary debts. However, proceeding enforcement with judgement by obtaining a sentence from a court for a monetary debt is also possible. It is mainly subject to the proceedings based on non-monetary debts. This procedure is used in the situations like delivering a movable estate, execution of a sentence regarding providing guarantee, delivering a child, etc.
To apply enforcement with judgment having a sentence and one of the documents having qualifications of a sentence is required. These documents are the following:
- Compromises made in presence of court,
- Acceptances made in presence of court,
- Notary bonds containing unconditional acknowledgement of a monetary debt,
- Letters of guarantee for appeal,
- Letters of guarantee for execution office,
- Sentences of the authorities competent to issue documents deemed to have qualifications of a sentence in special laws.
As in the other proceeding procedures, with request to issue proceeding, a payment order is sent to the debtor. In enforcement with judgment, debtor can proclaim for objection for three reasons:
a. Objection to Contradiction to the Sentence (this claim is not time-limited)
Debtor → Objection → 7 days → Enforcement Court →
b. Objection to Debt
c. Objection to Interest
- To enforcement with judgment can be applied, the sentence should not be prescribed. The prescription period for a sentence is 10 years (starting from the date of last transaction). However, sentences related to ownership of a real estate and other real rights (pre-emptive, adherence, purchase, etc.) on the real estate and to law of persons are not subject to prescription.
- Sentences that cannot be subjected to a proceeding if not finalized are:
- Sentences related to ownership of a real estate and other real rights on the real estate,
- Sentences related to family law, except from alimony provisions, and law of persons,
- Sentences related to arbitration award and recognition and approval of the sentences of foreign country courts.
Proceeding through Foreclosure
If debt has been guaranteed with a pledge, debtee follows the procedure of proceeding through foreclosure. If the revenue got from pledged asset sale is not sufficient to recover the debt, other proceeding procedures can be applied for the remaining part. As a rule, it is a proceeding without judgement however, if the debt or pledge is based on a sentence, proceeding with judgment procedure should be followed. It resembles to enforcement with and without judgment very much, however, here since debt has already been guaranteed with a pledge, there is no need for confiscation.
1. Proceeding without Judgement
- Foreclosure of a Movable Property
In this proceeding procedure also, with request to issue proceeding, a payment order is sent to the debtor and requested to pay the debt in 15 days. If the debtor does not object to the debt or right of mortgage and does not pay the debt, or if he/she proclaims for objection and his/her proclaim is cancelled or terminated, then debt is paid by selling the movable property. However, the request for sale should be demanded in 1 year.
- Foreclosure of a Real Estate (Mortgage)
Real estate on which the proceeding is based is included to request to issue proceeding and payment order. Moreover, if the mortgage has been created to guarantee a contract as current account or credit contract, this contract and the other related documents should also be included to request to issue proceeding. Debtor cannot object to right of mortgage in real estate pledge, he/she can only object to the debt. If debtor does not proclaim for objection in 7 days and does not pay the debt in 30 days or if he/she proclaims for objection and his/her proclaim is cancelled or terminated, then debtee can demand foreclosure. However, the request for sale should be demanded in 2 years.
2. Proceeding with Judgement
1. Foreclosure of a Movable Property
Different from proceeding without judgement related to chattel mortgage, here the sentence or the document having qualifications of a sentence should also be attached to request to issue proceeding. If debtor does not pay the debt in 7 days and does not submit a sentence ensuring staying of execution, then debtee can demand sale of the property. However, the request for sale should be demanded in 1 year.
2. Foreclosure of a Real Estate (Mortgage)
In cases of right of mortgage is determined with a sentence or a document having qualifications of a sentence and also in cases of table of mortgage agreement contains unconditional acknowledgement of a debt, this procedure can be used. Different from general confiscation, the sentence or the document having a feature of a sentence should be attached to request to issue proceeding. If debtor does not proclaim for objection within 7 days or if he/she proclaims for objection and his/her proclaim is cancelled or terminated and does not pay the debt within 30 days, moreover does not submit a sentence ensuring adjournment of execution, then debtee can demand sale of the real estate.
We have stated before that debtee can sue at enforcement court in some cases that can emerge when following one of the proceeding procedures shortly explained above. It is worth to mention shortly to the main cases adjudged at Enforcement Court:
Action for Annulment of Objection
During an enforcement proceeding in case that debtor objects to the proceeding, debtee should file an action for annulment of objection if he/she has one of the documents listed in Art. 68-68a. It is one the methods that enable enforcement proceeding without judgement which hold up due to the objection of debtor to continue in enforcement procedure without judgement. After the debtor has objected to the payment order sent by the debtee in-time (in 7 days) and made the proceeding to hold up, debtee may request annulment of objection by applying to Enforcement Court. However, enabling debtee hold up the objection of the debtor quickly and easily at enforcement court, rights of the debtors should not be endangered. That is, if there are strong evidences showing the debtor really has the debt, debtee can demand annulment of objection from enforcement court.
Here, debtee can prove the debt with any document, not just using one of the documents specified in Art. 68-68/a. In the same way, debtor can also prove his/her objection using any evidence. For this reason, adjournments of enforcement court on acceptance or rejection of proclaim for annulment of objection corporeally constitutes a definitive judgement. Proclaim for annulment of objection is subject to time limitation. Debtee can demand from enforcement court to adjudge annulment of objection in 1 year starting from date of notification on objection, if he/she does not demand, cannot request to issue proceeding without judgement anymore. This 1 year-time limit can cause losing right. If debtee does not file an action for annulment of objection in 1 year, proceeding without judgement issued quashes. However, even if proceeding without judgement quashes, his/her right to sue thereunder general provisions is reserved.
Negative Declaratory Action
It is a case to determine the debt subject to enforcement proceeding does not belong to the debtor against whom the proceeding has been issued. Debtor who does not proclaim for objection in the time period indicated in the payment order or his/her objection has not been accepted can take a negative declaratory action at the court where the execution office executing the proceeding is in or residential address of defendant in to be determined that the debt does not exists. Negative declaratory action can also be taken before enforcement proceeding. Against negative declaratory action, it is possible to start enforcement proceeding for the same debt, that is, proceeding of negative declaratory action does not stay automatically. “Court handling the negative declaratory action taken before enforcement proceeding can adjudge temporary injunction on staying enforcement proceeding on demand in return of a collateral not less than fifteen percent of the debt” thereunder EBL Art.72/2. At negative declaratory action taken after enforcement proceeding however, there is a strong presumption that action has been taken to sidestep the proceeding due to the action has been taken after enforcement proceeding; therefore courts cannot adjudge staying enforcement proceeding through temporary injunction at negative declaratory action taken after enforcement proceeding. However, “debtor can demand from court to pay the money in treasury of execution office through temporary injunction in return of a collateral not less than fifteen percent of the debt and recovery of the costs resulted from loss of time ”thereunder EBL Art.72/3. If debtee wins the case, temporary injunction is dissolved and debtee can recover his/her costs resulted from loss of time due to temporary injunction from the collateral paid by debtor for temporary injunction. If debtor wins the case, enforcement proceeding ceases.
Action for Restitution
If debtor has not been object to the payment order or if he/she had proclaimed objection but the enforcement proceeding has been finalized since his/her objection has been annulled, then the debtor have to pay the debt that does not belong to him/her.
To action for restitution can be taken, debtor need to be paid forcibly the debt that has been proceeded by debtee although he/she does not have the debt in terms of material law. With this action, opportunity of appearing before judge the debt of debtee as complainant is given to one proceeded against as a debtor. To be able to take the action, complainant need to
- not objected to the proceeding or his/her objection not be accepted,
- paid the debt that does not belong to him/her with duress per minas or after execution for this reason,
- take action for restitution in 1 year after the date of payment
thereunder EBL Art.72/7.
Burden of proof belongs to the complainant and negative declaratory action provisions regarding authorized court are identically valid.
Action for Recovery
At action for recovery, if debtor has a property on which a claim has been staked by a third person, execution office registers this at confiscation and grants a term of respite of three days for debtor or debtee to proclaim objection against this claim. In case of not objecting, the claim is deemed to be accepted. Debtor or the third person who is informed the confiscation has to claim for recovery in seven days starting from the date of informed on the matter. Otherwise, they cannot claim this at the same proceeding. Rights that can be claimed on confiscated property:
- Right of property that is a unlimited real right
- Limited real rights (chattel mortgage, mortgage, or right to enjoyment of a property, right of residence or other right of easement)
- Personal rights braced for through getting the real estate registry annotated (rights of redemption, purchase, pre-emption)
Action for Nullity
Persons having possibility to go bankrupt or their property to be confiscated may commit fraudulent (questionable) acts to smuggle property from debtees. Debtee may transfer his/her property to another person against the possibility of his/her property to be confiscated. In such cases, debtees cannot find a property to be confiscated to recover their debts, therefore they could not clear the debt fully or when the debtor goes bankruptcy, properties transferred before in this way are not been registered to bankrupt’s estate and rights of debtees suffers. An action can be taken for debtor’s this kind of acts aiming to transfer property against rights of debtees before confiscation or bankruptcy to be nullified. It is not a real action, it is a personal action. That is, with action for nullity, ownership of the property or properties in question does not return to the debtor, only debtee recovers his/her debt from the cost of the property. This kind of actions should be taken in 5 years starting from the date of the act subject to nullity. This time limit can cause lose right.
Action for Bankruptcy
If the debtor does not object to the payment order in seven days and does not pay it, debtee can demand to debtor’s bankruptcy be adjudged through action for bankruptcy. Also, if debtor proclaims for objection to the payment order, debtee can demand to be adjudged annulment of objection together with debtor’s bankruptcy. Action for bankruptcy should be taken in 1 year starting from the date of the payment order has been served to the debtor.