International Debt Collection Turkey: Lira Risk & Legal Reality
International Debt Collection Turkey: Currency, Courts & Cultural Navigation
The Turkey Challenge
Turkey presents a unique combination of collection challenges for international creditors: currency volatility (the Turkish lira has depreciated significantly against major currencies), a legal system that combines Continental European civil law with distinctly Turkish procedural characteristics, and a business culture where personal relationships drive payment priorities.
Despite these challenges, Turkey's collection system works — particularly for creditors who understand its specific mechanisms. The Execution and Bankruptcy Law (Law No. 2004) provides enforcement tools that are more aggressive than most European systems, including direct execution against the debtor's assets without a prior court judgment for certain claim types.
The Collection Process
Phase 1 — Formal demand. A formal notice sent through a Turkish notary public. The demand establishes the debtor's obligation and triggers default interest. For claims denominated in foreign currency, the demand should specify whether payment is required in the original currency or Turkish lira equivalent at the exchange rate on the date of payment.
Phase 2 — Amicable collection. A Turkish-speaking collector contacts the debtor. Resolution rates for commercial debts under 12 months: approximately 45-55%. Turkish business culture is relationship-oriented — the collector's ability to navigate culturally appropriate communication while maintaining firm payment expectations is critical.
Phase 3 — Execution proceedings. Turkey's distinctive enforcement mechanism: the creditor files directly with the Execution Office for a payment order, without a prior court judgment. The debtor has 7 days to object. If no objection: immediate enforcement. If the debtor objects, the creditor must file a court case to establish the claim.
Phase 4 — Court proceedings. Commercial courts handle commercial claims. Turkish commercial courts are procedurally formal and require Turkish-language submissions. Timeline: 12-18 months for contested claims, 6-9 months for straightforward documentary cases.
Currency Considerations
Lira volatility creates a timing dynamic: the longer collection takes, the less the recovered lira amount is worth in the creditor's home currency. This makes early, aggressive collection particularly important for Turkey claims. If the contract allows foreign currency claims, insist on payment in the original currency — Turkish courts recognise and enforce foreign currency obligations.
Key Parameters
Limitation period: 10 years for commercial claims under the Turkish Commercial Code.
Default interest: Determined by the Turkish Central Bank policy rate for commercial claims — significantly higher than European rates due to Turkey's monetary policy environment.
Enforcement tools: Bank account seizure, salary attachment, property seizure, and vehicle registration blocks — all executed through the Execution Office without requiring a separate court order once the execution proceeding is final.
Turkey rewards speed and local expertise. The enforcement system is powerful but procedurally specific — a Turkish-based collection partner is essential, not optional.
