Frequently Asked Questions About Payment Order and Contesting to Payment Order

The person to whom a payment order has been sent has difficulty in understanding what this document means and the legal conseuqences of sending this document. However, after the notification of the payment order, it is necessary to take action  in a very short time. Otherwise, negative consequences may arise, such as having to pay the creditor even though she/he is not actually a debtor, or the goods being seized and sold for this debt. The payment order and the procedure for objecting to the payment order should be well understood in order to avoid such reversible and irreparable results. In this bulletin, we have compiled the answers to the most frequently asked key questions on the subject.

What is the Payment Order?

A payment order is a type of “pay your debt” notice sent by the creditor to the person believed to be indebted. The payment order is sent by the enforcement offices. It is the first step of the enforcement proceedings issued against the debtor upon the application of the creditor to the enforcement office. The payment order contains information such as the identity and address of the debtor and the creditor, the amount of the debt, the bank account information of the enforcement office where the debt will be paid, the time given to the debtor to pay this debt, and the time the debtor has to object to this debt.

(Article 60 of the Enforcement and Bankruptcy Law)

Is the debt requested by the payment order a legally due and payable debt?

The fact that a payment order has been sent does not prove that the sender is actually in debt. The debt requested with the payment order is not a legally finalized debt yet. The debtor, who thinks that this debt does not belong to him/her or that he/she has already paid it to the creditor even though he/she has such a debt, can object to this debt. Depending on the type of enforcement proceedings issued against the debtor, the contesting made by the debtor bear different consequences. In case of objection to the debt in the proceedings through general attachment, this objection stops the enforcement proceedings. If the creditor takes action and fails to suspend the debtor’s objection or withdraw the appeal, the debtor does not have to pay this debt during the enforcement proceedings.

In the case of proceeding through attachment pertaining to bills of exchange, in case of objection, the debtor’s goods may be seized, but not sold, since the enforcement proceedings will not be halted. The enforcement court will decide whether to halt the proceedings with the objection.

(Articles 61, 62 of the Enforcement and Bankruptcy Law)

What Should the Person Who Was Sent with a Payment Order Thinks She/He Is Not In Debt?

If the person receiving the notification of the payment order thinks that she/he is not a debtor for any reason or believes that the proceedings issued against her/him are unfair and unlawful, she/he should object to the payment order. The objection is made to the enforcement offices or the enforcement courts, depending on the type of enforcement proceedings.

(Articles 61, 62 of the Enforcement and Bankruptcy Law)

What are the Grounds for Contesting to the Payment Order?

The person to whom a payment order has been sent may object to the original, interest or both of the debt by claiming reasons such as that the debt in the payment order has been paid before, that the debt has not matured yet, that the debt is time-barred, that there is no such debt, and that if the subject of the proceeding is a bond, this note is free of charge (commitment note) and the time period has been given for payment. Apart from these, the debtor may object to the payment order by claiming that the enforcement office is not competent and that there is another enforcement proceeding that has already been initiated for the same debt and is still in progress. The debtor may raise several non-contradictory objections at the same time.

How Many Days is the Contesting Period to the Payment Order?

The period of contesting to the payment order varies according to the type of enforcement proceeding. While the objection period (in some cases) is 5 days in the proceeding through attachment pertaining to bills of exchange, objections must be made to the payment order within 7 days, which is the general objection period in the proceedings through general attachment. These deadlines are definite, and in case of missed deadlines, the debtor’s right to object is lost.

(Article 62, 168/4 of the Enforcement and Bankruptcy Law)

Where Should a Contesting to the Payment Order Be Made?

To contest to the payment order should be made to the enforcement office in the proceedings through general attachment. If a payment order has been submitted during the proceeding process through the attachment pertaining to bills of exchange, the appeal must be made to the enforcement court.

What is the Consequence to Contest to the Payment Order in Due Course?

If an contesting is made to the payment order in due time, this objection made by the debtor in the proceedings without judgment through general attachment halts the enforcement proceedings. The creditor cannot request the seizure of the debtor’s property by continuing the proceeding. In order for the creditor to demand the seizure of the debtor’s goods, he or she must apply to the enforcement court for the suspension of the contesting of the debtor’s or file a lawsuit for the withdrawal of appeal. As a result of these processes, if the creditor is right, she/he will be able to continue the enforcement proceedings.

To contest to the payment order only prevents the sale of the attached goods in the proceedings through attachment pertaining to bills of exchange. It does not halt enforcement proceeding operations, but sales.  For example, even if the payment order is objected in due time, the seizure of the debtor’s goods is not released due to this objection, the goods are seized. But the seized goods cannot be sold.

(Article of the Law on Enforcement and Bankruptcy 66, 67, 68, 169, 170).

What Happens If the Payment Order Is Not Contested in Due Time?

If the payment order is not contested in due time, it no longer can be contested. Because, the 7 period stipulated for the objection to the payment order is a definite and final term. As a result of not contesting to the payment order, the payment order becomes final and the creditor may request the seizure of the debtor’s assets. In this case, the debtor can only try to avoid paying the debt by filing a negative declaratory action in the general courts. However, filing a lawsuit will still not prevent the continuation of the enforcement proceedings. While the lawsuit continues on the one hand, enforcement proceedings continue on the other hand, and since the enforcement proceedings will usually be concluded earlier, the debtor may have to make a payment to the creditor before the lawsuit is decided. In this case, the debtor can file a replevin case in order to recover the money paid unjustly from the creditor, or the current negative declaratory action will be converted into a replevin case.

Since the contesting to the payment order does not automatically suspend the enforcement proceedings in the proceedings by way of attachment pertaining to bills of exchange, the creditor may request the seizure of the debtor’s goods after the legal payment period of 10 days from the notification of the payment order has passed without making payment. Here, the creditor does not need to wait for the payment order to be finalized to request a lien.

(Articles 66, 67, 68, 168 of the Enforcement and Bankruptcy Law).

Is There a Way to Contest the Payment Order After It Has Elapsed?

The debtor, who cannot object to the payment order within the legal period, is given the right to object with an opportunity called delayed objection. However, in all cases, it is not possible to make a delayed objection after the deadline, and the conditions sought in the Law must be fulfilled in this regard. In order to make a delayed objection, the payment order must not have been contested in due time due to an obstacle beyond the control of the debtor. The delayed objection must be made to the enforcement court within 3 days from the clearance of the obstacle. However, in any case, a delayed objection can be made until the seized goods are sold. A delayed objection cannot be made after the sale has taken place. In the contesting, information and documents related to the reasons and proof of the failure to object to the payment order on time must be submitted to the court. If the court accepts the appeal made, the enforcement proceedings will halt.

(Enforcement and Bankruptcy Law art. 65).