Action for Declaration of Non-Debt (Negative Declaratory Action)

Sometimes individuals or companies face enforcement proceedings over a debt based on a promissory note for a debt that never arose, has already been paid, or was issued solely as security. The deadline to object to the payment order may have been missed, or the objection may not have been enough to stop the proceedings. In such cases, the main remedy available to the debtor is an action for declaration of non-existence of debt (negative declaratory action). Through this action, the debtor asks the court to declare that they do not owe the debt to the person claiming to be the creditor.

This action can be filed both before and after enforcement proceedings, and the stage at which it is filed directly affects whether the proceedings can be stopped. Below, we explain this difference, the rules on security deposits and compensation, and the restitution route to follow after the debt has been paid.

When can an action for declaration of non-existence of debt be filed?

The most common examples in practice are:

• A promissory note given as security being enforced even though the secured debt never arose,
• New enforcement proceedings being initiated for a debt that has already been paid,
• A forged signature on the note, or the amount of the note being altered afterward,
• A payment being demanded even though no contract was ever concluded or the contract is invalid,
• Fees and debt items disputed in card, subscription, or loan relationships.

For the action to be filed, the plaintiff must have a legal interest. The initiation of enforcement proceedings, or the creditor threatening the debtor with proceedings, generally demonstrates the existence of this interest.

The action can be filed not only for debts that are already the subject of enforcement proceedings, but also for a debt that is at risk of being enforced in the future. For example, it is possible to file an action before proceedings begin against a person who holds a note bearing your signature and demands payment. In the action, you may request a declaration that the entire debt, or only a part of it, does not exist; a partial declaration allows the debtor to contest only the amount they do not accept.

Action filed before and after enforcement proceedings

Before enforcement proceedings

In a negative declaratory action filed before enforcement proceedings have begun, the debtor may request a preliminary injunction from the court to stop the enforcement proceedings by providing security of no less than fifteen percent of the claim. If this injunction is granted, the creditor can still initiate proceedings, but they cannot move forward.

After enforcement proceedings

A negative declaratory action filed after the proceedings have begun does not stop the enforcement proceedings. At this stage, the debtor, again by providing security of no less than fifteen percent of the claim, may request a preliminary injunction preventing the money deposited with the enforcement office from being paid to the creditor. In other words, the proceedings and attachments continue, but the money collected is not handed over to the creditor until the case is concluded.

Because of this difference, when faced with a creditor's claim, acting before proceedings begin strengthens the debtor's position. If proceedings have already begun and the objection period has not yet expired, objecting to the payment order should be considered first; our article on objecting to a payment order can serve as a guide on this subject.

Burden of proof and evidence

In an action for declaration of non-existence of debt, as a rule, the burden of proving the existence of the claim lies with the defendant who claims to be the creditor. However, if the debtor, faced with a promissory note or signed document, asserts that the debt has been paid or that the note was given as security, they must prove this claim themselves. Claims raised against a note, as a rule, must be proven with written evidence; therefore, payment receipts, contracts showing the security relationship, and correspondence are of great importance. In the case of a forged signature claim, an expert examination is conducted.

Compensation: to which party, and when?

The rules on compensation in a negative declaratory action are shaped by the outcome of the case and whether an injunction has been granted:

• If the case is decided in favor of the debtor: If it becomes clear that the creditor pursued enforcement unjustly and in bad faith, the creditor may be ordered, at the debtor's request, to pay compensation of no less than twenty percent of the claim.
• Proof of bad faith: Winning the case alone is not enough for this compensation; it must be shown that the creditor pursued enforcement although they knew or should have known that the debt did not exist.
• If the case is decided against the debtor: If the proceedings were stopped by an injunction, the debtor may be ordered to pay compensation of no less than twenty percent for the loss the creditor suffered due to this delay.

For this reason, a request for a preliminary injunction should be made only after realistically assessing the chances of winning the case.

After the debt is paid: restitution action

If the debtor is forced to pay the enforced amount while the negative declaratory action is pending, the case automatically continues as a restitution action. If the debtor has not filed a negative declaratory action and has paid the debt under enforcement pressure, they may file a restitution action within one year from the date of payment to claim back the money paid. If this period is missed, the conditions for other remedies, such as an unjust enrichment action under the general provisions, must be examined separately.

Competent court, jurisdiction, and mediation

An action for declaration of non-existence of debt is filed not before the enforcement court, but before the general court with subject-matter jurisdiction depending on the nature of the dispute: the commercial court of first instance for commercial relationships, the labor court for employer-employee relationships, the consumer court for consumer transactions, and as a rule the civil court of first instance in other cases. Negative declaratory and restitution actions may be filed before the court at the location of the enforcement office that conducted the proceedings, or before the court at the defendant's place of residence.

If the dispute falls within the scope of mandatory mediation as a prerequisite for filing suit, a mediator must be approached before filing; for example, Article 5/A of the Turkish Commercial Code, as amended in 2023, expressly brings negative declaratory and restitution actions in commercial cases within this scope. For employer-employee and consumer disputes, the mediation provisions in their own laws must also be examined separately. Because the scope of mediation has been expanded in recent years, the current regulation should be checked with regard to the specific case. It should also be remembered that, in urgent situations, there is no need to wait for the mediation process to request a preliminary injunction.

Our firm's support

On the debtor's side, we provide support in reviewing the enforcement file and documents, preparing the injunction request, and filing and conducting negative declaratory or restitution actions. On the creditor's side, we handle the defense against these actions and pursue compensation claims. For the general framework, you can visit our Enforcement and Bankruptcy Law page. Every case is unique; which route to follow should be determined by assessing the specific circumstances separately.