Introduction

In Turkish enforcement and bankruptcy law, negative declaratory and restitution lawsuits are vital legal tools that protect both debtors and creditors. These lawsuits allow parties to challenge the legitimacy of a debt or recover funds that have been wrongfully collected. This guide explores the legal framework for these types of lawsuits, their applications, and recent developments in Turkish law.

Purpose:

• A negative declaratory lawsuit is filed by a debtor to challenge the existence or validity of a debt. The goal is to obtain a court declaration stating that the debtor does not owe the claimed debt.
• These lawsuits are commonly used in cases where creditors have initiated enforcement actions for debts that the debtor disputes.

• Negative declaratory lawsuits are governed by the Turkish Execution and Bankruptcy Law (EBL). The debtor must provide evidence that the debt either does not exist or has been wrongfully claimed by the creditor.

• Filing a negative declaratory lawsuit does not automatically stop the enforcement process. However, the debtor may request a stay of execution (icranın durdurulması) if they provide collateral to the court.
• If the court rules in favor of the debtor, the enforcement action is annulled, and any collected amounts must be returned to the debtor.

• Negative declaratory lawsuits are often filed when a creditor claims a debt based on incorrect information, or when the debtor believes they have already settled the debt.

Purpose:

• A restitution lawsuit is filed by a debtor to recover funds that have been wrongfully collected through enforcement proceedings. These lawsuits arise after the debtor has paid the debt under protest, and later seeks to prove that the payment was unjustified.

• Restitution lawsuits are also governed by the Turkish Execution and Bankruptcy Law (EBL). The debtor must demonstrate that the payment was made involuntarily (due to enforcement action) and that the debt was either non-existent or invalid.

• Restitution lawsuits can only be filed after the debtor has made the payment under protest. The debtor must also have a valid legal claim challenging the legitimacy of the debt.
• If the court rules in favor of the debtor, the creditor is obligated to return the wrongfully collected funds, along with any applicable interest.

• Restitution lawsuits are typically filed when a debtor believes that they were coerced into paying a debt due to the threat of asset seizure, despite the debt being invalid or already settled.

Creditor Protections:

• Creditors are entitled to defend their claims in both negative declaratory and restitution lawsuits. They must provide evidence supporting the validity of the debt and prove that the enforcement process was lawfully initiated.

• Debtors who file a negative declaratory lawsuit and seek to stop the enforcement process must provide collateral to protect the creditor’s interests. This ensures that creditors are not left without recourse if the lawsuit is unsuccessful.

• If a court rules in favor of the debtor in a negative declaratory lawsuit, the enforcement process is canceled, and the creditor may be required to compensate the debtor for any wrongfully seized assets or funds.
• In restitution lawsuits, creditors are required to return any funds collected unjustly, along with interest.

Recent changes to Turkish enforcement and bankruptcy law have improved the efficiency of negative declaratory and restitution lawsuits:

1. Faster Proceedings: Courts are now required to expedite cases involving wrongful enforcement actions to minimize the financial strain on debtors.
2. Digital Platforms: New digital platforms for filing lawsuits and tracking enforcement actions have made it easier for debtors to challenge claims and recover wrongfully collected funds.

Negative declaratory and restitution lawsuits are important legal remedies in Turkish enforcement and bankruptcy law. They provide debtors with the means to challenge illegitimate debts and recover wrongfully seized funds, while ensuring that creditors can defend their claims. Understanding these legal tools is essential for both debtors and creditors navigating enforcement proceedings in Turkey.