Ministry of Justice takes action: Debtors who hide assets from foreclosure face heavy penalties

The Ministry of Justice is preparing a new regulation to prevent debtors from reducing their assets in bad faith. In this context, changes to be made to the Enforcement and Bankruptcy Law will increase the penalties applied in cases where debtors intentionally deplete their assets. According to information published in the pro-government newspaper Türkiye Gazetesi, if a debtor intentionally reduces their assets to cause loss to their creditor, they will face a prison sentence of 1 to 4 years and a judicial fine of up to 3,000 days.

Under the draft, situations such as the total or partial disposal, destruction, or devaluation of assets, transferring them to others through collusion, and making false declarations of debt will be considered as intentional reduction of assets.

For this crime to be punishable, the creditor must obtain a final certificate of insolvency issued by the enforcement officer or prove that they are unable to collect their debt. Furthermore, a prison sentence of 2 to 5 years and a judicial fine of up to 3,000 days are proposed for those who remove attachments that are part of a real estate mortgage but are not recorded in the title deed, with the intent to harm the creditor.

News Source: 12punto