What does default mean? What is debtor's and creditor's default?

What Does Default Mean? | Enforcement Lawyer | İzmir Lawyer | Izmir Law Firm

What does default mean?

Arabic tamarrud

1. name, archaic Stubbornness, defiance, resistance.

2. noun, archaic, law, economics No additional interest payments required.

3. noun, archaic, law, economics The act of refusing to pay a debt without any valid reason; resistance.

What does debtor default mean?

A debtor who owes a due debt is considered in default upon receiving a notice from the creditor.. If the date on which the debt is to be paid has been determined jointly or by one of the parties through duly giving notice based on a right reserved in the contract, the debtor shall be in default upon the expiration of that date; in the case of tort, on the date the act was committed; and in the case of unjust enrichment, on the date the enrichment occurred. However, if the unjustly enriched party is acting in good faith, notification is required.

Default Interest

If the applicable annual default interest rate is not agreed upon in the contract, it shall be determined according to the legal provisions in force on the date the interest obligation arises. The annual interest rate agreed upon in the contract cannot exceed one hundred percent of the annual interest rate determined under the Turkish Commercial Code. If a contractual interest rate is agreed upon but no default interest rate is specified in the contract, and the annual contractual interest rate is higher than the interest rate specified in the first paragraph, the contractual interest rate shall apply to the default interest rate.

What does creditor default mean?

Yapma veya verme edimi gereği gibi kendisine önerilen alacaklı, haklı bir sebep olmaksızın onu kabulden veya borçlunun borcunu ifa edebilmesi için kendisi tarafından yapılması gereken hazırlık fiillerini yapmaktan kaçınırsa, temerrüde düşmüş olur. Alacaklı, müteselsil borçlulardan birine karşı temerrüde düşerse, diğerlerine karşı da temerrüde düşmüş olur.

According to Article 1530, Paragraph 7 of the Turkish Commercial Code, the default interest rate to be applied in case of late payments in the supply of goods and services and the minimum amount of compensation that can be claimed for collection expenses.

Article 117 of the Turkish Code of Obligations: 

“"The debtor of a due debt is deemed to be in default upon the creditor's notice. If the due date for performance of the debt has been jointly determined or if one of the parties has specified it by giving due notice based on a right reserved in the contract, the debtor is deemed to be in default upon the expiration of that date; in tort cases, on the date the act was committed; and in unjust enrichment cases, on the date the enrichment occurred. However, in cases where the unjustly enriched party is acting in good faith, notice is required for default.". 

Conditions for Debtor's Default:

a) The possibility of performance

b) The debt becoming due

c) Creditor's notice

d) The creditor's readiness to accept performance

e) The debtor does not have the right to refuse performance. 

Temerrüde düşmek ise, zamanında borcun ödenmemesidir.  Yükümlülüklerin geç de olsa yerine getirilmesi durumunda temerrüt hali sona erer; fakat gecikme nedeniyle temerrüde düşülen tarih ile yükümlülüğün yerine getirildiği tarih arasındaki süre “geçmiş günler faizi” olarak görülerek temerrüt faizi işletilir. Örneğin bir borç sebebi ile icra takibi yapılacaksa işletilecek iki tür faiz vardır. Bunlardan ilki, takip açıldığı günden itibaren işletilmeye başlanır ve borcun ödeneceği güne kadar işler. İkincisi ise temerrüde düşme tarihi dediğimiz, borcun asıl ödenmesi gereken tarihten takip açılış tarihine kadar işleyecek olan faizdir.

Default interest and default procedures, which are more commonly encountered in commercial relations, are regulated in Article 1530 of the Turkish Commercial Code. Accordingly: 

MADDE 1530– (1) Aksine bir hüküm bulunmadığı takdirde, ticari hükümlerle yasaklanmış  işlemler ve şartlar batıldır. Ancak, sözleşme uyarınca yerine getirilmesi gereken edimler için kanunun veya yetkili makamların koymuş olduğu en yüksek sınırı aşan sözleşmeler en yüksek sınır üzerinden yapılmış sayılır; sınırı aşan edimler hata ile yerine getirilmiş olmasa bile, geri alınır. Bu sınırlarda, Türk  Borçlar Kanununun 27 nci maddesinin ikinci fıkrasının ikinci cümlesi uygulanmaz.

(2) In transactions for the supply of goods and services between commercial enterprises, if the debtor fails to pay his debt on the date stipulated in the contract or within the specified payment period, except in cases where the creditor has fulfilled his supply obligation arising from the law or the contract, he shall be deemed to be in default without the need for a warning.

(3) The creditor of the defaulting debtor is entitled to interest from the date stipulated in the contract or from the day following the end of the payment period, even if it is not stipulated.

(4) If the payment date or period is not specified in the contract, or if the specified period is contrary to the fifth paragraph, the debtor shall be deemed to be in default without the need for a warning at the end of the following periods, and the creditor shall be entitled to interest:

a) At the end of a period of thirty days following the debtor's receipt of the invoice or equivalent payment request.

(b) If the date of receipt of the invoice or equivalent payment request is uncertain, at the end of the thirty-day period following receipt of the goods or services.

c) If the debtor received the invoice or equivalent payment request prior to the delivery of the goods or services, at the end of the thirty-day period following the date of delivery of the goods or services.

d) Kanunda veya sözleşmede, mal veya hizmetin kabul veya gözden geçirme usulünün öngörüldüğü hâllerde, borçlu, faturayı veya eş değer ödeme talebini, kabul veya gözden geçirmenin gerçekleştiği tarihte veya bu tarihten daha önce almışsa, bu tarihten sonraki otuz günlük sürenin sonunda; şu kadar ki, kabul veya gözden geçirme için sözleşmede öngörülen süre,  mal  veya  hizmetin  alınmasından  itibaren otuz  günü  aşıyor ve bu  durum alacaklının aleyhine ağır bir haksızlık oluşturuyorsa, kabul veya gözden geçirme süresi mal veya hizmetin alınmasından itibaren otuz gün olarak kabul edilir.

(5) The payment period stipulated in the contract may not exceed sixty days from the date of the invoice or equivalent payment request or the date of receipt of the goods or services or the completion of the review and acceptance procedure for the goods or services. However, the parties may agree on a longer period, provided that it does not create a serious injustice against the creditor. However, if the creditor is a small or medium-sized enterprise (SME) or an agricultural or livestock producer, or the debtor is a large-scale enterprise, the payment period may not exceed sixty days.

Default interest rates can vary depending on the type of debt and are specified in the relevant contracts. Therefore, when dealing with default interest, attention should be paid to the contract terms, if any, and the current rates at the time of the transaction. 

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