Under the Enforcement and Bankruptcy Law, Law No. 2004, only merchants and commercial companies can be declared bankrupt (Article 43). A creditor can use ordinary bankruptcy proceedings (seven days to pay or object), proceedings on cheques and bills (five days) or direct bankruptcy. Postponement of bankruptcy was abolished by Law No. 7101 in 2018; concordat now offers up to five months of provisional and 18 months of definitive respite. Bankruptcy claims must be filed within one month of the announcement, and unsecured trade creditors rank fourth under Article 206.
A foreign supplier with unpaid invoices from a Turkish distributor, a foreign shareholder whose Turkish subsidiary has run out of cash, and an investor whose counterparty has announced a konkordato, a composition with creditors supervised by the court, all face the same statute: the Enforcement and Bankruptcy Law, Law No. 2004. Its insolvency rules have changed considerably. Postponement of bankruptcy was abolished in 2018, concordat became the main restructuring tool, and Law No. 7571 of 24 December 2025 rewrote Article 278 on gifts made before insolvency. This article explains the creditor's position at each stage.
Under Article 43 of Law No. 2004, bankruptcy proceedings may be conducted only against merchants under the Turkish Commercial Code, Law No. 6102, persons subject to the rules on merchants, and persons made subject to bankruptcy by a special law. Under Articles 16 and 124 of Law No. 6102, commercial companies are merchants: collective, commandite, joint stock, limited and cooperative companies. Almost every Turkish trading counterparty, whether a company or a sole trader, can therefore be made bankrupt. Holding shares does not make a foreign shareholder a merchant, so a company's bankruptcy does not extend to its shareholders; personal exposure arises only under the rules in section 10. Individuals who are not merchants cannot be declared bankrupt, although any debtor may apply for concordat. A merchant who abandons trade remains open to bankruptcy proceedings for one year from the announcement (Article 44).
Article 43 lets the creditor of a merchant choose haciz yoluyla takip, enforcement by attachment, instead of bankruptcy, and switch routes once without a new fee. Attachment is individual: the first attaching creditor is paid first, and others join on equal terms only with the documents listed in Article 100. Bankruptcy is collective. Against a solvent but slow debtor, attachment is usually faster, as explained in our guide to debt collection and legal enforcement in Türkiye, with attached property realised through the enforcement sale and auction process.
| Creditor's Question | Attachment, Bankruptcy and Concordat |
|---|---|
| Who may start it | Attachment: any creditor, against any debtor. Bankruptcy: a creditor or the debtor, only against debtors subject to bankruptcy. Concordat: the debtor, or a creditor entitled to request bankruptcy (Article 285). |
| Who benefits | Attachment: the attaching creditor first. Bankruptcy: all creditors, by rank (Articles 206 and 207). Concordat: all creditors bound by the confirmed project. |
| First deadline | Attachment: seven days to pay or object (Articles 60 and 62). Bankruptcy: seven days, or five on cheques and bills (Articles 155 and 171). Concordat: seven days for creditors to object to the respite (Article 288). |
| Effect on other enforcement | Attachment: none. Bankruptcy: attachment proceedings stop; pledge enforcement continues (Article 193). Concordat: enforcement stayed, including tax collection (Article 294). |
| Usual result for an unsecured creditor | Attachment: full payment if assets are found first. Bankruptcy: a share in the fourth rank and a certificate of insolvency. Concordat: a reduction or rescheduling binding dissenting creditors. |
The standard route, iflas yoluyla adi takip, ordinary proceedings by way of bankruptcy, starts at the enforcement office of the debtor's principal place of business, or for a company with its head office abroad, of its Turkish branch. The bankruptcy action must always be filed with the commercial court of the debtor's principal place of business, and no jurisdiction clause can change that (Article 154).
The payment order gives the debtor seven days to pay or to object, either to the debt or to being subject to bankruptcy (Article 155). Objections follow the logic described in our article on objecting to a payment order, but here the commercial court examines the objection together with the bankruptcy request. The right to request bankruptcy lapses one year after service of the payment order (Article 156). The request is announced, and other creditors have 15 days to intervene (Article 158). The requesting creditor must advance the costs up to the first creditors' meeting (Article 160).
If the debtor did not object, or its objections are unjustified, the court orders it to pay the debt with interest and costs, or deposit that amount with the court, within seven days (Article 158). If it does neither, bankruptcy is declared at the first session. This depo kararı, the deposit order, is often when a reluctant but solvent debtor pays. The court may also order protective measures over the debtor's assets (Article 159). Appeals lie within two weeks, but do not prevent the announcement of bankruptcy and the formation of the estate (Article 164).
A creditor holding a negotiable instrument that has fallen due can use kambiyo senetlerine dayalı iflas, bankruptcy proceedings based on negotiable instruments. The payment order gives five days to pay and five days to object or complain (Articles 171 and 172). If the debtor does neither, the creditor applies to the commercial court, which issues the same seven day deposit order (Article 173). For exporters paid with Turkish cheques or notes, this is often the strongest lever available.
Doğrudan iflas, direct bankruptcy, needs no payment order. Under Article 177 a creditor may apply where the debtor has no known domicile, absconds, defrauds creditors or hides assets; where it has suspended its payments; where a concordat has failed under Article 308; or where a judgment debt remains unpaid after an enforcement order. The debtor may also apply itself with a declaration of assets and creditors (Article 178). Under Article 179, capital companies and cooperatives whose liabilities exceed their assets on an interim balance sheet at probable sale values are declared bankrupt on the declaration of their managers, liquidators or a creditor. Article 376 of Law No. 6102 requires the board, when there are signs of this, to notify the commercial court and request bankruptcy, unless creditors covering the shortfall agree in writing to rank behind all others.
Older sources still describe iflasın ertelenmesi, postponement of bankruptcy, which let an insolvent company suspend bankruptcy while it pursued a rescue plan. Articles 179/a and 179/b were repealed by Law No. 7101 of 28 February 2018, published in the Official Gazette on 15 March 2018. Requests then pending continued under the old rules (Provisional Article 14). A distressed company now chooses between concordat and bankruptcy.
Any debtor that cannot pay its debts as they fall due, or is in danger of that, may request concordat to obtain time, a reduction or both (Article 285). It must file a preliminary project, interim balance sheets, a creditor list, a comparison with the probable result of bankruptcy and an independent audit report (Article 286). The court then grants a geçici mühlet, a provisional respite, of three months, extendable to five (Article 287). It is announced in the Trade Registry Gazette, and creditors may object within seven days (Article 288). If success appears possible, the court grants a kesin mühlet, a definitive respite, of one year, extendable by six months (Article 289). A commissioner supervises the debtor, which may not grant pledges, give guarantees or dispose of important assets without court permission (Articles 287 and 297).
During the respite no enforcement may be started, including collection under the Law on the Collection of Public Receivables, Law No. 6183, pending proceedings are stayed and precautionary attachments are not executed; only first rank claims, chiefly employees' claims, can still be enforced (Article 294). Interest on unsecured claims stops from the definitive respite unless the project provides otherwise. Secured creditors may enforce their pledge, but the asset cannot be sold during the respite unless the court allows it (Article 295). Claims must be filed within 15 days of the commissioner's announcement (Article 299).
The project is accepted if signed by more than half of the registered creditors holding more than half of the claims, or by more than one quarter of the creditors holding more than two thirds of the claims; first rank creditors and the debtor's close family are not counted (Article 302). The court confirms it only if creditors receive more than in bankruptcy and the offer matches the debtor's resources (Article 305). Once confirmed it binds dissenting creditors, except first rank claims, secured claims up to the collateral's value and public receivables (Article 308/c). Creditors whose claims were disputed must sue within one month (Article 308/b).
All attachable assets of the bankrupt, wherever located, form the iflas masası, the bankruptcy estate (Article 184), and later disposals by the bankrupt are void against creditors (Article 191). All debts become due, except claims secured on immovable property (Article 195). The iflas idaresi, the bankruptcy administration, has three members chosen by the enforcement court from the creditors' nominees; one must be a financial adviser and one a lawyer (Article 223). A creditor that gives an address and an advance is served with the administration's decisions, so time limits run from service.
Creditors must register claims within one month of the announcement, with originals or certified copies of their evidence (Article 219). Late claims are accepted until closure, at the creditor's cost and without a share in earlier distributions (Article 236). The sıra cetveli, the ranking schedule, can be challenged before the commercial court within 15 days of its announcement (Article 235). Costs of the bankruptcy are paid first (Article 248), secured creditors from their collateral, then Article 206 applies:
| Rank | Claims Included |
|---|---|
| First rank | Employees' claims accrued in the year before bankruptcy, including notice and severance pay; family maintenance claims of the last year |
| Second rank | Claims of persons whose property the debtor administered under parental authority or guardianship |
| Third rank | Claims privileged by special laws, including taxes and other public receivables (Article 21 of Law No. 6183) |
| Fourth rank | All other claims, including trade creditors and foreign suppliers |
A lower rank receives nothing until the rank above is paid in full (Article 207). Each unpaid creditor receives an aciz vesikası, a certificate of insolvency, for the shortfall (Article 251), explained in our guide to the certificate of insolvency.
The iptal davası, the action for annulment, may be brought by a creditor holding a certificate of insolvency or by the bankruptcy administration (Article 277). It covers three groups:
The right of action lapses five years after the transaction (Article 284).
Bankruptcy does not by itself make directors or shareholders liable. Under Article 553 of Law No. 6102, board members and managers who culpably breach their duties are liable for the loss to the company, shareholders and creditors, and Article 556 lets creditors pursue that claim when the bankruptcy administration does not. A board that failed to notify the court under Article 376 is the typical target. For public debts, partners of a limited company are liable in proportion to their shares, and legal representatives from their personal assets (Article 35 and repeated Article 35 of Law No. 6183). Fraudulent bankruptcy is punishable by three to eight years' imprisonment under Article 161 of the Turkish Penal Code, Law No. 5237. See also our article on director liability after company closure.
Foreign official documents need certification by the issuing state or a Turkish consulate, or an apostille under the 1961 Hague Convention (Article 224 of the Code of Civil Procedure, Law No. 6100), and foreign language documents need a translation (Article 223). A lawyer may consent to a concordat for you only with express authority under Article 74 of Law No. 6100, so the power of attorney must say so; see our guide to a power of attorney signed abroad.
Under Article 48 of the Code on Private International and Procedural Law, Law No. 5718, foreign persons who sue or start enforcement must provide teminat, security for costs, unless exempt on reciprocity; Article 17 of the Hague Convention of 1 March 1954 on civil procedure, in force for Türkiye since 1973, exempts nationals of contracting states domiciled in one of them. A creditor resident abroad must name a domicile in Türkiye (Article 58 of Law No. 2004). Since most deadlines run from announcements, our bankruptcy and foreclosure law service monitors filings for clients abroad.
Türkiye has not adopted the UNCITRAL Model Law on Cross-Border Insolvency, and Law No. 5718 has no insolvency rule. A final foreign judgment is enforced only after a Turkish court grants tenfiz, an enforcement order (Article 50), subject to reciprocity, public policy and due process (Article 54); recognition needs the same conditions except reciprocity (Article 58). Whether a foreign bankruptcy order can be recognised, and with what effect, depends on the court's assessment. Until then, it does not stop creditors attaching assets in Türkiye. Where a foreign debtor has a Turkish branch, Turkish bankruptcy proceedings are possible (Article 154).
Yes. Any creditor may, subject to security for costs under Article 48 of Law No. 5718 unless exempt.
No. Bankruptcy applies only to merchants and persons subject to it by special law (Article 43).
Seven days in ordinary proceedings and five days on cheques, bills and promissory notes.
It lapses one year after service of the payment order (Article 156).
No. Law No. 7101 abolished it in 2018.
Up to five months provisional and 18 months definitive.
No, except first rank claims; secured creditors cannot have the asset sold without court permission.
Yes, once confirmed, unless your claim is first rank, a public receivable, or secured and within the value of the collateral (Article 308/c).
One month from the announcement; later claims bear costs and miss earlier distributions.
In the fourth rank, after costs, secured creditors, employees and public receivables.
Yes, within one year for gifts and preferences and five years for transactions intended to harm creditors.
Only after a Turkish court recognises or enforces it under Law No. 5718.
Turkish law gives a creditor three tools: attachment for individual recovery, bankruptcy through ordinary, negotiable instrument or direct proceedings, and participation in concordat, which since 2018 has replaced postponement of bankruptcy. Deadlines are short and mostly run from announcements, and unsecured foreign creditors usually rank fourth, so early action and avoidance claims matter.
If a Turkish counterparty owes you money, has filed for concordat or has been declared bankrupt, our legal team can review your file and represent you before the enforcement office, the commercial court and creditors' meetings.
