Objection to a Debt and Removal of the Objection — Procedure and Consequences

What are objection to a debt and removal of the objection in enforcement proceedings? Learn about the types of objection, the action to annul the objection (İİK Art. 67), removal of the objection (İİK Arts. 68-68/a) and compensation for denial, under İİK Arts. 62-72.

A debtor's objection to a payment order is the most fundamental legal means of defence and causes the proceedings to halt. For the creditor to continue after the objection, they must have recourse either to an action to annul the objection or to removal of the objection. The Enforcement and Bankruptcy Law No. 2004 (İİK) governs objection to a debt and removal of the objection in detail in Arts. 62-72. This article deals comprehensively with the types of objection, the differences between objecting to the debt and to the signature, the action to annul the objection, definitive and provisional removal of the objection, compensation for denial and the action for release from the debt.

What Is an Objection to a Debt and How Is It Made?

An objection to a debt is the debtor's assertion, against the payment order served on them in enforcement proceedings, that the debt does not exist, disputing its amount or maturity, or asserting that it cannot be claimed on other legal grounds. Governed by İİK Art. 62, an objection must be made within 7 days of service of the payment order in general enforcement by attachment without a judgment. It is made to the enforcement office conducting the proceedings, in writing or orally. Where the objection is oral, the enforcement officer draws up a record. No reason need be given for an objection to be valid; a debtor makes a valid objection simply by saying “I owe nothing”. In a partial objection, however, the amount objected to must be expressly stated (İİK Art. 62/4); otherwise no objection is deemed to have been made. The grounds that may be advanced in an objection to a debt are not limited. The debtor may raise the following: that the debt never arose; that it has been paid in whole or in part (discharge); that it is time-barred; that it has not yet fallen due; that set-off or deduction is available; that the contract is invalid; that the debt has been extinguished (by release, novation, merger and the like); and an objection to venue.

An objection to venue differs in nature from an objection to the debt but is raised alongside it in practice. The debtor may object to venue by asserting that the enforcement office lacks competence (İİK Art. 50). In such an objection the debtor must expressly identify the competent enforcement office; otherwise the objection to venue is invalid.

What Is an Objection to a Signature and How Does It Differ?

In general enforcement by attachment the debtor must separately and expressly deny the signature on an ordinary deed; otherwise the signature is deemed accepted. A signature on a notarised deed carries strong official evidential force under HMK Art. 205, and on an official record under Art. 204; even so, allegations of forgery, incapacity or defect of intent may be raised by the statutory procedure. It is not correct to say that “there is no recourse against a signature on a notarial document”.

Do the Proceedings Halt as a Result of the Objection?

Yes, enforcement proceedings halt automatically upon a timely objection by the debtor (İİK Art. 66). Halting means that the creditor cannot proceed with attachment, sale and other enforcement steps. The objection provides interim legal protection, and for the creditor to continue the objection must be overcome.

There are two routes for continuing proceedings halted by an objection: the action to annul the objection (İİK Art. 67) and removal of the objection (İİK Arts. 68-68/a). These two routes have different conditions, time limits and consequences. The creditor must assess which is appropriate to their situation and choose accordingly.

Precautionary attachments ordered before the objection was made are not lifted by the objection. A precautionary attachment retains its validity until it becomes a definitive attachment. Since the proceedings have halted upon the objection, however, the conversion of the precautionary attachment into a definitive one is possible only once the objection has been overcome.

What Is the Action to Annul the Objection and What Are Its Conditions? (İİK Art. 67)

The creditor may bring an action to annul the objection before the general courts within one year of service of the objection. If the one-year period passes, the proceedings do not lapse automatically; they remain halted by the objection, and the possibility of continuing those proceedings by way of annulment is lost. The creditor may bring a general claim action within the substantive limitation period. As to proof, the rules of the Code of Civil Procedure on proof by deed, prima facie written evidence and evidence agreements apply. Compensation for denial depends on a request and requires that the claim be liquid and the objection unjustified. An invoice, a credit card debt or a compensation claim is not automatically treated as liquid or indeterminate merely by reason of its type; whether the debtor could calculate the amount unaided and the clarity of the records are examined.

What Is Compensation for Denial and When Is It Awarded? (İİK Art. 67/2)

Compensation for denial is the compensation, of at least twenty per cent (20%) of the claim, that a debtor must pay the creditor where it is established in an action to annul the objection that the debtor's objection was unjustified (İİK Art. 67/2). It has a deterrent function and aims to prevent unjustified objections. For compensation for denial to be awarded, the following conditions must be met together: the creditor must have brought an action to annul the objection (a claim for compensation for denial in removal proceedings is assessed separately); the action must be decided in the creditor's favour; the claim must be liquid (determined or determinable); and the creditor must have requested compensation for denial in the statement of claim or during the proceedings.

Liquidity is examined on the facts by reference to whether the debtor could determine the amount of the debt unaided from the data available to them. That the claim is described as an invoice, credit card, rent or compensation claim does not by itself determine the outcome. Where part of the claim is determinable and the remainder requires adjudication and assessment, the conditions for compensation are assessed separately for each part.

What Is Compensation for Bad Faith? (İİK Arts. 67/2 and 72)

Compensation for bad faith is compensation that may be awarded, at the debtor's request, where it is established in an action to annul the objection that the claimant creditor was unjustified and acted in bad faith in the proceedings. Under İİK Art. 67/2 the rate may not be less than twenty per cent of the amount of the proceedings dismissed; the mere dismissal of the action does not of itself demonstrate bad faith.

For compensation for bad faith to be awarded, the debtor must request it. Where the action to annul the objection is dismissed, the court, if requested, separately assesses whether the creditor acted in bad faith in the proceedings. If bad faith is established, compensation of at least twenty per cent of the amount dismissed is awarded.

Compensation for bad faith and compensation for denial are counterparts: compensation for denial is directed at a debtor who objects without justification, while compensation for bad faith is directed at a creditor who commences proceedings without justification. Both types of compensation encourage the parties to act honestly and aim to deter unjustified applications.

What Is Removal of the Objection and What Are Its Types? (İİK Arts. 68-68/a)

Where the creditor relies on an ordinary deed whose signature is admitted, a document bearing a notarised signature, a document of a public office, or a receipt or document issued by a competent authority — as listed in İİK Art. 68 — they may seek definitive removal from the enforcement court within six months. On acceptance the debtor, and on dismissal the creditor, may be ordered to pay compensation of not less than twenty per cent, upon the other party's request and on the statutory conditions as to being unjustified; it is not automatic in every decision.

What Is the Action for Release from the Debt? (İİK Art. 69)

A debtor against whom provisional removal of the objection has been ordered may bring an action for release from the debt before the general courts within seven days of the pronouncement or service of the decision, providing security of fifteen per cent of the claim. The creditor as a rule proves the existence of the underlying claim; the debtor proves defensive facts such as payment, set-off or release. That the debtor is the claimant does not place the whole burden of proof on them.

Differences Between the Action to Annul the Objection and Removal of the Objection

Removal takes place before the enforcement court within six months on a limited documentary examination; the annulment action is heard before the general courts within one year under the general rules of proof. Since the dismissal of a removal request does not create res judicata as to the substantive claim, an action to annul the objection may be brought if the one-year period has not expired. Appeals and the stay of enforcement are subject to the monetary threshold for finality at the date of the decision and to the conditions in İİK Art. 36.

Points for the Debtor to Bear in Mind

The most critical point for the debtor is to comply with the objection period. If the 7-day period in general enforcement by attachment without a judgment, or the 5-day period in negotiable instrument proceedings, is missed, the proceedings become final and the debtor's assets may be attached.

The objection petition must state clearly whether the objection is to the debt or to the signature. If an objection to the signature is not made expressly and separately, the debtor is deemed to have accepted the signature on the deed. This increases the debtor's burden of proof later.

In a partial objection the amount objected to must be stated precisely. Indeterminate partial objections (such as “I object to part of my debt”) are invalid, and the debtor is treated as not having objected at all (İİK Art. 62/4).

It is recommended that the debtor also prepare the evidence in their possession together with the objection. In order to mount a defence in the annulment action or at the removal stage, it is critical that the debtor retain receipts, bank slips or other written documents evidencing payment of the debt.

Points for the Creditor to Bear in Mind

The most important point for the creditor is to determine correctly the date on which the objection was served on them and to comply with the time limits. The 1-year period for the annulment action and the 6-month period for removal are forfeiture periods.

It is of considerable importance that the creditor assess the documents in their possession correctly and choose the appropriate legal route. A creditor holding one of the documents listed in İİK Art. 68 may have recourse both to removal and to annulment; removal will, however, produce a faster result.

The creditor must expressly state their claim for compensation for denial in the statement of claim or during the proceedings. Compensation not requested is not awarded by the court of its own motion. The requirement that the claim be liquid must also be observed; a claim for compensation for denial will be dismissed for non-liquid claims.

The creditor should not pursue an annulment action and a removal request in parallel to overcome the same objection. Since the dismissal of a removal request does not create res judicata as to the substantive claim, an action to annul the objection may be brought on its conditions if the one-year period has not expired.

Principal Points Examined in Practice

In removal of the objection, the limits of the documentary and signature examination in İİK Arts. 68 and 68/a apply; in annulment, the general rules of proof in the Code of Civil Procedure. In a partial objection the amount objected to must be expressly stated. Where a signature examination is required, samples suitable for comparison must be gathered and the expert examination must rest on reasoning that can be reviewed. Compensation for denial or bad faith cannot be awarded merely because a party lost the case, without the statutory conditions as to request, liquidity and lack of justification being met.

Final note: This content is for general information purposes and does not constitute legal advice. For your specific legal problems you are advised to obtain professional support from an attorney.

Frequently Asked Questions

Do the proceedings lapse if the annulment action is not brought within one year?

No; they remain halted, and the possibility of continuing those proceedings by way of annulment is lost.

Can a signature on a notarial deed never be challenged?

Allegations of forgery and other grounds of invalidity may be raised by the statutory procedure.

Is twenty per cent compensation automatic on definitive removal?

No; a request and the statutory conditions as to being unjustified are required.

What is the period for an action for release from the debt?

Seven days from pronouncement or service of the decision.