Concordat in Turkey 2026: Creditor Rights and Deadlines

Concordat (konkordato) in Turkey has emerged as the principal court-supervised debt restructuring mechanism for distressed companies, foreign creditors, and multinational corporations with capital exposure in the Turkish market. Codified under Articles 285 to 309/l of the Enforcement and Bankruptcy Law (İİK No. 2004) and substantially reshaped by Law No. 7101 in March 2018, the modern concordat regime stands as the most consequential restructuring instrument available to debtors seeking to avoid liquidation while preserving going-concern value. For foreign investors, lenders, and MNC counterparties, mastering the concordat architecture is no longer optional — it is a baseline requirement for credit decisions, cross-border lending structures, and downside scenario planning across the Turkish jurisdiction.

The strategic stakes are substantial. A poorly anticipated concordat filing by a Turkish counterparty can suspend enforcement actions overnight, freeze receivables, and impose binding haircuts on foreign creditors who fail to engage at the right procedural moment. Conversely, distressed multinationals operating Turkish subsidiaries can deploy the concordat to preserve operations, renegotiate trade lines, and restructure cross-border guarantees within a predictable judicial framework. This 2026 guide sets out the concordat process, statutory thresholds, voting mechanics, and the strategic considerations Istanbul Attorneys deploys for HNWI principals, lenders, and corporate clients navigating Turkish restructuring scenarios.

Key Takeaways

• Concordat is governed by İİK Articles 285 to 309/l and is available to any debtor unable to pay debts as they fall due, or at risk of that, whether merchant or not.

• The procedure unfolds in two stages: a temporary moratorium (geçici mühlet) of three months extendable by two and capped at five, followed by a definitive moratorium (kesin mühlet) of one year, extendable by six months.

• Approval requires the double majority under İİK Article 302 — more than half of registered creditors and half of registered claims, or more than a quarter of creditors and two-thirds of claims.

• Two deadlines decide a foreign creditor's position: seven days from publication to oppose the moratorium (Article 288) and fifteen days from publication of the commissar's call to declare the claim (Article 299).

• Clauses making a concordat filing a breach, a termination event or an acceleration trigger do not apply — Article 296 keeps operationally important contracts alive.

• Court ratification (tasdik) binds dissenting creditors, but not first-rank privileged claims, secured claims up to the value of the security, or public receivables under Law No. 6183.

The Legal Architecture of Turkish Concordat

Statutory Framework Under İİK No. 2004

The contemporary concordat regime rests on Articles 285 through 309/l of the Turkish Enforcement and Bankruptcy Law (İİK) — the range the Law itself cites in the closing paragraph of Article 308/h, and the range that carries concordat through asset abandonment in Articles 309/a to 309/l — as comprehensively revised by Law No. 7101 of 15 March 2018, which abolished the prior postponement of bankruptcy procedure (iflasın ertelenmesi) and recentred Turkish restructuring practice around the concordat. The full statutory text is published by the Turkish Ministry of Justice on the official Mevzuat Bilgi Sistemi (Turkish Legislation Information System), and remains the controlling reference for any cross-border restructuring engagement.

Concordat Compared with Bankruptcy and the Former Postponement Regime

Concordat is conceptually distinct from bankruptcy (iflas), which liquidates the debtor's estate, and from the abolished postponement of bankruptcy regime, which permitted indefinite operational continuity without binding restructuring. The concordat sits in the middle: a structured judicial pathway that preserves the going concern, binds dissenting creditors through the double majority, and ends in a court-ratified plan rather than asset liquidation. For foreign creditors weighing recovery strategies, this distinction governs the available toolkit, the timeline, and the realistic exit scenarios.

The Three Statutory Variants of Turkish Concordat

Turkish law recognises three concordat structures. Ordinary concordat (adi konkordato) is the standard pre-bankruptcy procedure deployed by going concerns and is the variant most relevant to MNCs and HNWI principals. Concordat after bankruptcy (iflastan sonra konkordato) operates within an open bankruptcy estate and is rarely deployed in cross-border scenarios. Concordat through asset abandonment (malvarlığının terki suretiyle konkordato) does not transfer ownership of anything to the creditors: under Article 309/a it confers on them the power to dispose of the debtor's assets, or to transfer all or part of those assets to a third party, and the creditors exercise their rights through concordat liquidators and a creditors' committee — a hybrid restructuring-liquidation vehicle. Selecting the correct variant at the outset is a strategic decision that materially affects creditor recovery and director liability exposure.

The Procedural Architecture: From Filing to Court Ratification

Filing the Concordat Application

Article 285 splits the venue rule in two: the application goes to the commercial court of first instance at the place specified in Article 154(1) or (2) where the debtor is subject to bankruptcy — in practice its business centre — and to the commercial court of first instance at the debtor's domicile where the debtor is not subject to bankruptcy. The filing must include the preliminary concordat project (konkordato ön projesi), the documents showing the debtor's financial position — for a debtor obliged to keep books, the latest balance sheet, income statement and cash flow statement prepared under the Turkish Commercial Code, together with interim balance sheets drawn up both on a going-concern basis and on probable sale values — a complete creditor schedule showing amounts and priority, and the concordat expense advance (gider avansı) fixed by the Ministry of Justice tariff. Article 286 is stricter than most foreign filers expect: the annexes must also include a table comparing what creditors receive under the project with what they would probably receive on bankruptcy, and a separate audit report from an audit firm authorised by the Public Oversight Authority (KGK), prepared under the Turkish Auditing Standards, giving reasonable assurance that the offer can be delivered. The final concordat project comes later — it is settled during the definitive moratorium under the commissar's supervision and put to creditors under Articles 301 and 302. Under Article 285 a creditor entitled to petition for the debtor's bankruptcy may also ask the court to open the procedure. Parties seeking strategic advice on filing posture and procedural defence regularly engage our litigation and dispute resolution practice before formal proceedings commence.

Temporary Moratorium (Geçici Mühlet)

Upon receipt of a procedurally complete application, the Commercial Court grants a temporary moratorium of three months, extendable by up to two further months on the application of the debtor or the temporary commissar; where the debtor applies, the temporary commissar's opinion is taken first, and the total may not exceed five months (Article 287). The court simultaneously appoints a temporary commissar (geçici komiser) to supervise the debtor's management and to safeguard creditor interests. The moratorium carries the effects of the definitive moratorium from day one: pending executions are suspended, no new enforcement may be commenced, and interim measures are limited to those expressly authorised by the court — subject to the two exceptions in Articles 294 and 295 set out below. Foreign creditors should identify their exposure and start monitoring the file in this window; the formal fifteen-day call to declare claims comes later, under Article 299, and a missed deadline materially weakens voting position further into the process.

Definitive Moratorium (Kesin Mühlet)

If the commissar's preliminary report demonstrates a realistic prospect of restructuring success, the court converts the temporary moratorium into a definitive moratorium of one year, extendable by up to six months under İİK Article 289. A permanent commissar (komiser) is appointed, and creditor classes are crystallised. During this phase, the debtor continues operations under commissar supervision, while the commissar verifies claims, evaluates the concordat project, and convenes the creditors' meeting (alacaklılar toplantısı). The definitive moratorium represents the operational core of the concordat — the period in which restructuring negotiations, valuation disputes, and creditor coordination unfold.

Declaring Your Claim: the Fifteen-Day Window

Under Article 299 the commissar publishes a notice calling creditors to declare their claims within fifteen days. Publication starts the clock, not the copy posted to known addresses. The notice must warn that a creditor who fails to declare will not be admitted to the negotiation of the project unless the claim already appears in the debtor's balance sheet. For a foreign supplier whose invoices sit in a disputed ledger, that line is the difference between voting and watching.

The Creditors' Meeting and the Article 302 Double Majority

Article 302 treats the project as accepted where it is signed by a majority exceeding either half of the registered creditors and half of the registered claims, or a quarter of the creditors and two-thirds of the claims. Only creditors affected by the project vote; first-rank privileged creditors under Article 206 are excluded, as are the debtor's spouse and children and the parents and siblings of the debtor and of the spouse, even where the marriage has ended — a rule that quietly defeats friendly-creditor arithmetic. Secured creditors count only for the part left uncovered by the valuation under Article 298, because pledged debt is restructured on a separate track: under Article 308/h, agreement by more than two-thirds of the secured claim amount binds a dissenting secured creditor to the longest-maturity deal reached with the others. Creditors may still join the majority in a seven-day accession period after the meeting.

Ratification: the Five Conditions of Article 305

A majority vote ratifies nothing by itself. Article 305 requires the court to be satisfied that the amount offered exceeds what creditors would probably receive on bankruptcy; that the offer is proportionate to the debtor's resources; that the Article 302 majority was reached; that first-rank privileged claims and debts incurred during the moratorium with the commissar's consent are paid in full or adequately secured unless the creditor expressly waives; and that the litigation costs and the fee (harç) on the sums to be distributed are deposited with the court before the decision. The first condition — the comparison against a bankruptcy outcome — is where a well-prepared creditor objection usually bites.

What the Moratorium Does to Contracts, Security and Time

The Stay, and the Interest That Stops

Article 294 changes a creditor's position overnight. During the moratorium no enforcement may be commenced, including collection under Law No. 6183 on public receivables; pending proceedings stop; interim injunction and interim attachment decisions are not applied; and limitation and forfeiture periods that an enforcement step would have interrupted do not run. Unless the ratified project says otherwise, interest stops accruing on every claim not secured by a pledge from the date of the definitive moratorium. Set-off is tested under Articles 200 and 201 by reference to publication of the temporary moratorium, and an assignment of future receivables agreed beforehand is void as to receivables arising afterwards.

The stay is not absolute, and the exceptions are where secured lenders live. Article 294 itself allows enforcement by attachment for the first-rank privileged claims listed in Article 206. More significantly, Article 295 keeps a pledge working: during the moratorium enforcement by realisation of the pledge may be started, or an existing proceeding continued, although no protective measures may be taken in that proceeding and the pledged asset may not be sold. An exception added by Law No. 7327 in 2021 goes further — where the concordat project does not envisage the business using the pledged asset, or where the asset will lose value or is expensive to preserve, the court may permit its sale under the Article 297(2) procedure, and the secured creditor is paid out of the proceeds up to the value of the pledge. A foreign lender holding Turkish security therefore keeps a route that the unsecured trade creditor does not.

Termination Clauses Stop Working

Article 296 protects contracts important to the continuation of the debtor's business, whether or not the counterparty is affected by the project. Provisions treating a concordat application as a breach, as just cause for termination, or as an acceleration event do not apply, and the contract cannot be terminated on that ground even where it is silent. The debtor's counterweight is the right to terminate excessively onerous continuing obligations with the commissar's favourable opinion and the court's permission; the compensation payable is then swept into the concordat project rather than paid in full.

What Ratification Binds — and What Escapes It

Under Article 308/c the concordat binds on ratification and covers every claim arising before the concordat application — and also claims that arose during the moratorium without the commissar's consent, dissenting creditors included. A foreign supplier who kept shipping after the moratorium opened, without the commissar signing off, is inside the haircut. Three categories escape: first-rank privileged claims under Article 206 — essentially employee claims accrued in the year before bankruptcy, including notice and severance pay, and family-law maintenance — secured claims up to the value of the security, and public receivables under Law No. 6183. Ordinary trade debt sits in the fourth rank. Debts contracted after the temporary moratorium with the commissar's consent, bank credit included, fall outside the concordat terms and rank immediately after secured claims. Article 308/ç adds a sting for creditors who moved early: attachments obtained before the temporary moratorium and not yet converted into cash lapse once the concordat binds. That rule has its own carve-out — under Article 308/ç(2) it does not apply to attachments securing the three excluded categories, namely first-rank privileged claims, secured claims up to the value of the security, and public receivables under Law No. 6183.

If the Restructuring Fails

Article 292 is a command, not a discretion: on the commissar's written report the court shall lift the definitive moratorium, reject the concordat request and, for a debtor subject to bankruptcy, declare bankruptcy of its own motion — where the estate needs protecting, where the concordat clearly cannot succeed, where the debtor breaches Article 297 or disregards the commissar's instructions or acts to harm creditors, or where a capital company or cooperative shown to be balance-sheet insolvent withdraws its concordat request. Appeal windows are short: under Article 308/a the debtor and the applicant creditor appeal within two weeks of service, other objecting creditors within two weeks of publication of the ratification decision, with a further two weeks for the appeal on points of law. Creditors whose claims were disputed have one month from that publication to sue under Article 308/b, and an unpaid creditor may later have the concordat rescinded as to itself under Article 308/e.

Common questions about concordat in Turkey

What is a concordat (konkordato) in Turkey?

A court-supervised debt restructuring under Articles 285 to 309/l of the Enforcement and Bankruptcy Law (İİK No. 2004). A debtor who cannot pay debts as they fall due, or who is at risk of that, proposes longer maturities, a reduction in the sums owed, or both. If the statutory majority accepts and the commercial court of first instance ratifies, the plan binds creditors who voted against it.

Can a foreign creditor participate in Turkish concordat proceedings?

Yes, on the same footing as Turkish creditors: opposing the moratorium within seven days of publication under Article 288, declaring the claim within fifteen days under Article 299, voting, sitting on the creditors' committee, and appealing under Article 308/a. A creditor with no presence in Türkiye instructs Turkish counsel under a power of attorney issued at a Turkish consulate or notarised and apostilled abroad, so no travel is needed.

How long does a concordat process take in Turkey?

The statute sets an outer frame, not a fixed duration. The temporary moratorium is three months, extendable by up to two, with a five-month ceiling under Article 287. The definitive moratorium is one year under Article 289 and may be extended by up to six months in cases of particular difficulty. Ratification follows, and appeals to the regional court of appeal and then on points of law add further time.

What creditor majority is required to approve a concordat?

Article 302 sets a double majority: more than half of the registered creditors representing more than half of the registered claims, or more than a quarter of the creditors representing more than two-thirds of the claims. Only creditors affected by the project vote, first-rank privileged creditors and the debtor's close family are excluded, and secured creditors count only for the uncovered part of their claims.

What happens to enforcement proceedings during a concordat?

Most of it stops. Article 294 bars new enforcement from the moment the temporary moratorium takes effect, suspends pending proceedings, and prevents interim injunction and interim attachment decisions from being applied. Two exceptions matter. First-rank privileged claims under Article 206 may still be pursued by attachment. And under Article 295 a secured creditor may start or continue enforcement by realisation of the pledge — but no protective measures may be taken and the pledged asset may not be sold, unless the court permits a sale because the project does not envisage the business using the asset, or the asset will lose value or is costly to preserve, in which case the secured creditor is paid from the proceeds up to the value of the pledge. Once the concordat binds, attachments obtained before the temporary moratorium and not yet realised lapse under Article 308/ç — except attachments securing first-rank privileged claims, secured claims up to the value of the security, and public receivables under Law No. 6183.

Can my contract be terminated if my Turkish customer files for concordat?

Not on that ground. Article 296 disapplies clauses treating a concordat application as a breach, as just cause for termination, or as an acceleration event, and bars termination on that basis even where the contract is silent, provided the contract matters to the continuation of the debtor's business.

Are debts that arise after the moratorium starts outside the concordat?

Only if the commissar consented to them. Article 308/c binds every claim arising before the concordat application and every claim arising during the moratorium without the commissar's consent. Debts contracted after the temporary moratorium with the commissar's consent, bank credit included, are not subject to the concordat terms, may be enforced even during the moratorium on default, and are paid immediately after secured claims and before all others.

Can a Turkish concordat be recognised abroad?

That depends on the law of the country where recognition is sought; Turkish law cannot answer it. In the other direction, a foreign judgment against a Turkish debtor needs an enforcement (tenfiz) decision under Article 50 of MÖHUK No. 5718 before it can be executed here, and Turkish law gives no automatic effect to a foreign insolvency order. Where assets sit in several countries, coordinated local advice beats reliance on any single order.

Concordat rewards preparation and punishes delay: the seven-day objection window, the fifteen-day claim declaration and the bankruptcy-comparison challenge at ratification all arrive early. If a Turkish counterparty has filed, or looks likely to, the useful step is to have the published file and the preliminary project read now. Our recognition and enforcement practice and our corporate and commercial team act on both sides of these proceedings; see also our guides to Turkish enforcement procedure and director liability.

This guide is general information on Turkish law, not legal advice on your own matter. Rules and practice change; check the position before you act.