The Parliament’s Justice Commission has accepted the bill amending the code of enforcement and bankruptcy and other codes (“Invoice“), also known as the Fifth Judicial Package. In accordance with the promulgation of the accepted bill, discussions began on Tuesday at the General Assembly of the Grand National Assembly of Turkey. With the bill, significant changes are envisaged regarding the Enforcement and Bankruptcy Code in order to reduce the workload and increase the efficiency of the enforcement and bankruptcy processes.
Significant changes to the Enforcement and Bankruptcy Code
The changes that will be made to the Enforcement and Bankruptcy Code with the promulgation of the aforementioned bill are as follows:
- Auctions for the sale of seized goods will now be conducted entirely electronically. The auctions will take place without effective participation, via the electronic sales portal integrated into the UYAP (Platform of the National Judicial Network), including the items currently held in the auction rooms in accordance with the legislation in force.
- The time limit for requesting the sale of movable property will be increased from six months to one year. According to the legislation in force, a sale can be requested within one year from the foreclosure of real estate, while the time limit for movable property is six months from the foreclosure. With the amendment, the time limit for requesting the sale of all movable and immovable property will be one year from the seizure of the property.
- The appraisal of the goods seized and the determination of the selling costs will be carried out according to a tariff. In the legislation in force, it is provided that the enforcement agent who carried out the seizure proceeds to the valuation of the seized goods and to the determination of the costs of sale. With the amendment, said transactions will be carried out at a rate to be determined by the Ministry of Justice. In this way, the differences in selling costs resulting from the sale of similar goods by fulfillment offices in different places will cease.
- It will be mandatory to pay the sales costs in advance with the request for the sale of the seized property. Pursuant to the amendment, the sales costs to be determined according to the aforementioned tariff must be previously filed in the enforcement file. Otherwise, if the costs are not paid within 15 days, it will be decided that the request for sale will be deemed not filed.
- On request, the debtor may be authorized to sell the seized property on a consensual basis.. According to the rider, the debtor may request authorization to sell the seized property within seven days of service of the expertise. Once the expertise is finalized, the execution manager will stop the forced sale operations and grant the debtor a period of 15 days. If the buyer, with whom the debtor has agreed, files the determined price in the enforcement file, the file will be sent to the enforcement court for approval of the sale. Under the rider, the price of a consensual sale will not be less than the sum of 80% of the appraisal or pre-emptive claims secured by the seized property, whichever is greater, and the sum of the costs. execution committed until arrange.
- At the appeal stage, the jurisdiction to decide on the suspension of execution will be taken by the regional courts and the Court of Cassation, and given to the enforcement jurisdiction of the place where the enforcement proceedings took place. .. As the stay of execution decisions currently constitute an unnecessary workload for the regional courts of justice and the Court of Cassation, which require the prosecution of the debtor or his counsel and entail a waste of time, the task of rendering the decisions will henceforth be handed over to the enforcement court of the place where the enforcement proceedings took place.
- With the decision of the enforcement court on further processing, property jointly owned by the debtor and the third party claimants may be placed in custody.. Thus, if the third party claimant agrees to act as receiver of the seized property, the property will not be placed in police custody. However, in the event that a decision to continue the proceedings is rendered in accordance with the first paragraph of Article 97 of the Enforcement and Bankruptcy Code, the assets may be placed in custody, thus establishing a balance between the interests of interested parties and prevent grievances arising from the immediate custody of such property.
- It will be compulsory to carry out together the operations of custody, expertise and sales request for motor vehicles registered in the register..
The planned changes serve to eliminate shortcomings in the current system and practices and to expand the use of technology in enforcement and bankruptcy proceedings. In particular, the change, which envisions the electronic sale of seized property, is an example of the smart integration of technology into court processes. Additionally, it helps reduce travel and physical contact in terms of enforcement and bankruptcy proceedings during the COVID-19 pandemic.
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