Is there a prison sentence for people who don't pay their debts?

Is There Imprisonment for Individuals Who Fail to Pay Their Debts? – Lawyer in Izmir

One of the most frequently asked questions by debtors is whether an arrest warrant will be issued against them due to their debts. Furthermore, debtors are concerned about whether they will face any sanctions for failing to pay their debts. First, let's state that no arrest or imprisonment warrant can be issued against you for any debt. According to Article 38 of our Constitution, no one's freedom can be restricted due to a contract. Different reasons are required for an arrest warrant to be issued. These reasons are specified in the Enforcement and Bankruptcy Law. A creditor who cannot collect a debt from a debtor has the right to collect the debt by force. In the Enforcement and Bankruptcy Law In order to make this enforceable execution effective, the law also imposes certain obligations on the debtor. If the debtor fails to fulfill their obligations in the manner and scope prescribed by law, certain sanctions are imposed. These are called enforcement and bankruptcy offenses. Let's examine this through the relevant legal article:

What are execution crimes?

1. Reducing one's assets with the intent to harm a creditor (Article 331)
2. Causing one's own incapacitation or knowingly aggravating one's condition through one's own actions (Article 332)
3. In commercial companies, those with management authority intentionally causing harm to creditors by failing to pay the company's debts (Article 333/a).
4. The removal of property over which the lessor has a lien, and allowing another person to occupy the place that needs to be vacated (Article 335)
5. Failure to declare assets (Article 337/1)
6. Acting contrary to the provisions regarding abandoning trade (Article 337/a)
7. Making false statements (Article 338)
8. Failure to report increases in assets and income after filing an asset declaration (Article 339)
9. Breach of commitment (Article 340)
10. Avoiding the delivery of a child (Article 341)
11. Re-entering the property and ship that have been legally surrendered (Article 342)
12. Opposition to the enforcement of judgments (Article 343)
13. Failure to pay alimony (Article 344)
14. Not requesting the bankruptcy of the capital company if necessary (345/a)
15. Withdrawal from raising in order to gain benefit (345/b)

Article 338/2: If a debtor, against whom a certificate of insolvency has been issued, fails to pay the debt related to the certificate of insolvency to the enforcement office within one month of the court determining that he/she is living above the minimum wage, he/she shall be sentenced to coercive imprisonment for up to one year.

According to Article 340, a debtor who, without a valid reason, fails to fulfill the debt payment condition agreed upon in the enforcement office pursuant to Article 33 or with the creditor's consent, shall be sentenced to coercive imprisonment for up to three months.

To illustrate these with practical examples:

• Making false asset declarations to understate one's assets in order to prevent future seizure of assets, thereby causing harm to creditors, will also result in imprisonment.
• Debtors cannot use the terms offered to them for paying their debts as an excuse.
• If a violation occurs without notification, a prison sentence will be imposed.
• Those who fail to comply with alimony orders issued after a divorce and do not make timely payments will be subject to coercive imprisonment.
• Those who cause difficulties or fail to comply with the court order when handing over children to their custodial parents will also be subject to imprisonment.
• If a tenant fails to pay their rent and the landlord is harmed, a prison sentence can be issued.
• Those who pursue personal gain in their bankruptcy and debt restructuring activities will also be convicted.
• Those who act contrary to established commercial practices are subject to penalties that restrict their freedom.
• Those who intentionally and fraudulently cause harm to the parties in concordat proceedings will also be sentenced to imprisonment.

While we can say that restricting freedom cannot be imposed solely on the basis of debt enforcement, it is possible in some cases to impose imprisonment on individuals who fail to pay their debts.

So what is the process of detention and imprisonment?

Coercive imprisonment serves as a compelling measure to ensure the debtor fulfills their obligation to pay the debt. There are two main reasons that lead to imprisonment for debtors:

1. Failure to declare assets or making a false declaration: This occurs when debtors declare in writing to creditors or bailiffs that they intend to pay their debts but fail to fulfill this promise.
2. Those who fail to make timely payments, or who fail to fulfill their payment obligation without giving a reason, will be subject to coercive imprisonment of up to 3 months upon complaint from the creditor. The individual will be released after paying their debt at the cashier's office within the 3-month imprisonment period.

If the defendant fails to pay the remaining debt to avoid conviction, he will again be subjected to coercive imprisonment. There is no such thing as the debt being erased upon serving time in prison. You have the right to be released from prison if you pay the debt during your imprisonment. Furthermore, interest will continue to accrue on the debt during this period. Coercive imprisonment, which is a disciplinary obligation, does not result in a criminal record. Decisions regarding coercive imprisonment under the Enforcement and Bankruptcy Law are subject to statute of limitations if not enforced within two years of the decision becoming final, and these penalties are not carried out. For actions regulated under the Enforcement and Bankruptcy Law that prescribe imprisonment and a fine as sanctions, the statute of limitations is 10 years.

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