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Due to the increase in world trade, international debt collection has become an increasingly important issue these days. Since debt collection procedures vary from country to country, this article explains the costs of opening enforcement proceedings in Turkey.
As explained in our article titled “How can a foreign company / private person collect their debts in Turkey?” », In Turkish law, there are different forms of enforcement proceedings. Yet in all types, foreigners must pay a security deposit of 20% of the total debt to initiate legal action in Turkey. However, if there is reciprocity between the debtor’s nation and Turkey, the creditor will be exempt from this requirement. The principle of reciprocity can be achieved through conventions, laws or international actions, for example the Hague Convention of 1961.
I. If the claim is secured by pledge:
In cases where the claim is secured by a pledge, the creditor is required to seize the pledge by contacting the enforcement offices before initiating a recovery procedure.
The creditor can continue the execution by judgment [see II.A. below regarding the costs] or execution without judgment [see II.B. below regarding the costs] depending on whether or not the pledge is based on a court decision. Therefore, the cost of foreclosure will depend on the enforcement procedure followed, as explained below. In both cases, the other costs linked to the sale of the pledge will be deducted from the turnover.
II. If the claim is not secured by a pledge:
A. Execution of a court decision / With judgment:
✓ Application fees [≌ TRY 60 (approx. EUR 6)]
✓ Other costs [e.g., notice fee]
✓ [If so] Costs associated with legal representation [except the attorney’s fee and cost for issuance of power of attorney] including proxy fees [≌ TRY 25 (approx. EUR 3)]
B. Execution without judgment / Via enforcement offices:
✓ Application fees [≌ TRY 60 (approx. EUR 6)]
✓ Other costs [e.g., notice fee]
✓ [If so] Costs associated with legal representation [except the attorney’s fee and costs for issuance of power of attorney] including proxy fees [≌ TRY 25 (approx. EUR 3)]
✓ Advance fees [0,5% of the total amount to be collected] With regard to receivables in foreign currencies, the advance commission will be calculated according to the equivalence in TRY of the receivable on the basis of the exchange rate on the date of opening of the execution procedure.
So, for example, the cost of collecting a debt of EUR 100,000.00 in April 2021 will be as follows in each procedure:
- Execution with judgment: [≌ TRY 100 (approx. EUR 10)]
- Execution without judgment: [≌TRY510000(approxEUR510)[≌TRY510000(approxEUR510)[≌TRY510000(environ510EUR)[≌TRY510000(approxEUR510)
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