Statute of Limitations on Debts

It is worth noting some provisions of the Turkish Code of Obligations regarding the statute of limitations. Article 146 of the Turkish Code of Obligations states that "unless otherwise provided by law, every claim is subject to a 10-year statute of limitations." As can be understood from this provision, if the legislator has not stipulated a statute of limitations for a specific debt through a regulation, the 10-year statute of limitations will apply. Another question that comes to mind is the statute of limitations for credit card debts. The statute of limitations for credit cards is 10 years, but there are some conditions. First of all, the bank must not have taken any action on your credit card debt for 10 years. If the bank's lawyer initiates enforcement proceedings against you within 10 years, the 10-year period is reset. If your credit card debt has been transferred by the bank to an asset management company, then the statute of limitations is 20 years. Since the debts of asset management companies are under the purview of the TMSF (Savings Deposit Insurance Fund), the statute of limitations is set at 20 years; however, they only need to renew an enforcement file to extend the statute of limitations.

Another point of interest regarding this matter is the issue of statute of limitations in enforcement proceedings. In short, enforcement proceedings are the collection of a debt through the state. The termination of enforcement proceedings and the debtor's release from debt occurs in two ways: the first is the dismissal of the enforcement proceedings, and the second is the statute of limitations. It is important not to confuse the dismissal of enforcement proceedings with the statute of limitations. If a file is not processed within one year from the time it is submitted to enforcement, it is removed from the process. This is called the dismissal of enforcement proceedings. To revive the file, an application for renewal is required. When the renewal request is made, the file becomes active again. The statute of limitations, as mentioned above, is the permanent closure of your debt if no action is taken on your file within the periods specified in the law. According to the Law of Obligations, the statute of limitations in enforcement proceedings is 10 years from the date of initiation. If the creditor renews the application every year, this period extends to 20 years. After these periods, the debtor's debt is extinguished, and the creditor can no longer demand payment. It is useful to draw attention to some points here. For example, let's say your creditor initiates enforcement proceedings against you. If no action is taken within 10 years, your debt is waived. However, if the other party applies for renewal of an enforcement file that has been closed after one year of inactivity, the file becomes active again and the statute of limitations is suspended. The only condition for the statute of limitations to continue is to wait for the file to be closed again. If the other party abandons the proceedings within the specified period, the file will be closed again, and the statute of limitations will resume from where it left off.

The debt is extinguished upon the expiration of the statute of limitations, but this does not mean that no one can initiate enforcement proceedings against you on the grounds that the debt has expired due to the statute of limitations. So what should you do in this situation? You must raise your claim of statute of limitations within a maximum of 5 days of receiving the notification. If you do not object to the statute of limitations, things will turn against you.

Limitations Periods Regulated in the Law of Obligations

Generally, as mentioned at the beginning of this article, unless otherwise stipulated in the law, every claim is subject to a 10-year statute of limitations period as stated in Article 146 of the Turkish Code of Obligations.

Five-Year Statute of Limitations: The rights and claims subject to a five-year statute of limitations are regulated in six clauses in Article 147 of the Code of Obligations. After establishing a general ten-year statute of limitations due to practical needs, the legislator felt the need to specifically regulate a five-year statute of limitations for certain claims. These are:

1. Rent, principal interest, and other periodic payments such as fees.
2. The costs of accommodation in hotels, motels, guesthouses, and holiday resorts, as well as the costs of food and beverages in restaurants and similar establishments.
3. Receivables arising from small art projects and small-scale retail sales.
4. In a partnership, receivables arising from the partnership agreement are those between partners or between the partners themselves and the partnership; receivables are those between the directors, representatives, auditors of a partnership and the partnership or its partners.
5. Claims arising from agency, commission, and brokerage agreements, excluding commercial brokerage fees.
6. Claims arising from a contract for work, except in cases where the contractor fails to perform its obligations at all or properly due to gross negligence.

Interruption of the Statute of Limitations

The interruption of the statute of limitations refers to the termination of a prescriptive period that has already begun but is not yet complete, due to the occurrence of one of the grounds for interruption stipulated in the law, and its subsequent re-initiation upon the removal of the ground for interruption. The purpose of regulating the interruption of the statute of limitations, unlike the purpose of regulating grounds for suspension, is not to address social relations and practical difficulties that hinder the claim and litigation of debt between the creditor and the debtor; rather, it is to give weight to the actions of the debtor, the creditor, and the judicial authorities aimed at ensuring the fulfillment of the debt. Articles 154 and 155 of the Turkish Code of Obligations specify when the statute of limitations is interrupted. According to these articles:

1. If the debtor has acknowledged the debt, especially if they have paid interest or made partial repayment, or have provided collateral or a guarantor,
2. The statute of limitations is interrupted if the creditor has applied to a court or arbitrator through a lawsuit or defense, initiated enforcement proceedings, or applied to the bankruptcy estate.

Impact on chain debtors

• If the statute of limitations is interrupted against one of the joint debtors or against one of the debtors of an indivisible debt, it is also interrupted against the others.
• When the statute of limitations is interrupted against the principal debtor, it is also interrupted against the guarantor.
• When the statute of limitations is interrupted against the guarantor, it is not interrupted against the principal debtor.

For more information on this matter, you can consult with our firm's experienced lawyers.

Trainee Lawyer Fatih CEYHAN