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What is Bankruptcy? Pursuit Through Bankruptcy, Direct Bankruptcy and Insolvency Bankruptcy process against the merchant debtor within the scope of EBL art.154-177 and TCC art.376 has been updated as of 2026
Bankruptcy is a general enforcement method in which all the debtor's assets are liquidated and distributed among creditors. As a rule, traders and trading companies are subject to bankruptcy. Bankruptcy is filed in two main ways: bankruptcy proceedings initiated by the creditor and direct bankruptcy at the debtor's own request. In the guide, persons subject to bankruptcy, follow-up through bankruptcy, objection to payment order, bankruptcy case, direct bankruptcy, indebted company, consequences of bankruptcy and its difference with composition are explained.
1. Who is Bankruptcy Applicable to?
Bankruptcy is not applied to every debtor, but as a rule to debtors engaged in commercial activities. Merchants, trading companies, cooperatives and banks are subject to bankruptcy. Tradesmen and farmers are generally not subject to bankruptcy; General seizure procedure is applied for these. Before choosing bankruptcy, the creditor must check whether the debtor is actually subject to bankruptcy from the trade registry records.
The bankruptcy decision removes the debtor's power of disposition; The assets pass to the bankruptcy estate and are liquidated. Therefore, its consequences are much more severe than the general foreclosure route.
Ordinary pursuit through bankruptcy (Art. 155 et seq.) Payee Payment order is sent; The debtor may object; bankruptcy case is filed
Bankruptcy method specific to bills of exchange (Art. 171 et seq.) bill of exchange creditor It is based on a bill of exchange; carries separate terms and periods
Direct bankruptcy (Art.177 et seq.) Debtor or governing body The debtor's own bankruptcy request; going into debt or paying off
The creditor initiates bankruptcy proceedings by applying to the enforcement office where the debtor is registered in the trade registry. A bankruptcy payment order is sent to the debtor. The debtor pays the debt, objects or does nothing within 7 days from the notification of the payment order.
Payment: If the debt and expenses are paid within 7 days, the pursuit ends. Objection (Art. 156): The debtor may object to the debt, not being subject to bankruptcy or the authority of the enforcement office. The objection is made through a petition. A valid objection stops the proceedings.
Inaction: If the debtor does nothing, the creditor can file for bankruptcy.
In case of objection, the creditor applies directly to the commercial court of first instance, not to the enforcement court. It requests both the removal of the objection and the bankruptcy of the debtor in the same case. The bankruptcy case must be filed within 1 year from the notification of the payment order (Art. 156/4) and this period is restrictive. If the proceedings are withdrawn, the creditor cannot initiate bankruptcy proceedings again without waiting for 1 month (Art. 157).
The bankruptcy case is heard in the commercial court of first instance at the debtor's transaction center. Simple trial procedure is applied and a hearing is mandatory. If the debtor has not objected, the court only conducts a formal review. Before the bankruptcy decision is made, the court may take conservation measures to protect the debtor's assets (Art. 159, 161). These measures cover all confiscable property of the debtor.
Bankruptcy expenses belong to the creditor who requests bankruptcy until the first meeting of creditors (Art. 160). It is not possible to abandon the case after the bankruptcy decision is made (Art. 165/2).
If the debtor sees that his assets do not cover his debts, he can request bankruptcy himself without waiting for the creditor's follow-up. This is called direct bankruptcy (Art. 177). A merchant who suspends payment may also request bankruptcy.
The situation is more serious in capital companies. If the company's assets do not cover its debts, that is, if the company is in debt, the board of directors must notify the court (TTK Article 376). Board members who fail to notify may be held personally responsible for any damage that may occur. Therefore, company managers should monitor their balance sheets regularly.
The debtor's authority to dispose of his assets is terminated and the assets pass to the bankruptcy estate.
Many proceedings against the debtor, including seized goods, are dismissed.
Interest does not accrue on receivables included in the bankruptcy estate.
Creditors register their receivables with the bankruptcy administration and receive payments according to the order table.
Pledged receivables are covered primarily by the price of the goods subject to the pledge; Ordinary receivables are at the end of the order table.
Legal action can be taken against the bankruptcy decision within a short time. Removal of the bankruptcy decision is also subject to certain conditions in the law.
Concordat is a way of recovery in which the debtor restructures his debts by reaching an agreement with his creditors without going into bankruptcy. Bankruptcy is a method of liquidation. Concordat prevents bankruptcy if possible. However, the preparation and approval of the concordat project depends on separate conditions; This topic is covered in a separate guide.
A limited company did not pay a supplier's receivable of 1.2 million TL. The supplier initiated proceedings through bankruptcy, and the company objected to the payment order. The supplier filed a bankruptcy case in the commercial court of first instance within 1 year.
The creditor filed a single lawsuit for the removal of the objection and the bankruptcy decision. The court examines the existence of the receivable and whether the company is subject to bankruptcy. If the objection is found, the case is rejected; If it is not found, a bankruptcy decision is made. If the company is in debt, the board of directors may have increased the risk of liability by not reporting this to the court.
Can bankruptcy be requested for personal debts?
As a rule, no. Bankruptcy is foreseen for merchants and trading companies. General foreclosure is applied against non-merchant debtors.
How many days does it take to object to a bankruptcy payment order?
7 days are given to object to the bankruptcy payment order and the objection is made through a petition.
What happens to seized goods if a bankruptcy decision is made?
The debtor's assets pass to the bankruptcy estate; The lien is included in the sharing carried out by the bankruptcy administration and is distributed according to the order table.
What to do if the company is in debt?
The board of directors must report the situation to the court or consider recovery methods such as concordat. Neglecting to notify may result in personal liability.
Bankruptcy is a difficult process for both creditors and debtors. While it provides a collective collection opportunity for the creditor, it means the liquidation of assets for the debtor. Küheylan Law Firm carries out the legal process in commercial receivables files, from bankruptcy proceedings to bankruptcy proceedings, and from insolvency assessment to recovery methods for companies; For detailed evaluation, an appointment can be requested via info@kuheylanhukuk.com.
Important Legal Notice: The legal explanations contained in this guide have been prepared by Küheylan Law Firm for general information purposes and do not constitute legal advice. In enforcement and bankruptcy law, the periods are short and the consequences are heavy; Since each file has its own unique conditions, it is recommended to get support from a lawyer before taking action. © 2026 Küheylan Law Firm. All rights reserved.
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