ComparisonİİK Art. 154 ff., 285 ff.; TTK Art. 376 (Enforcement and Bankruptcy Law, Commercial Code)
Concordat vs Bankruptcy in Türkiye: Key Differences
A company that cannot pay its debts has two basic legal routes: concordat and bankruptcy. One aims to keep the company alive, the other to liquidate it.
Comparison
| Concordat | Bankruptcy | |
|---|---|---|
| Purpose | Continuation of the company and restructuring of debts | Liquidation of assets |
| Operations | Continue under the commissioner’s supervision | Stop, bankruptcy administration takes over |
| Proceedings | As a rule stayed during the moratorium | Merged into a single bankruptcy liquidation |
| Creditors | The project is voted on and binds them once confirmed | Paid according to the ranking schedule |
| Shareholders and managers | The company continues to exist | The legal entity ends |
| Initiated by | The debtor, or a creditor entitled to request bankruptcy | A creditor or the debtor |
Which one in which situation?
Concordat makes sense if the business has the capacity to generate cash and the problem comes from its debt structure.
If operations no longer generate cash and there is no prospect of recovery, concordat only prolongs the process. In that case managers must also take into account the duty to notify over-indebtedness under Art. 376 of the Turkish Commercial Code.
For a detailed comparison that also covers out-of-court restructuring, see Concordat or financial restructuring?.
Frequently asked questions
If concordat fails, does the company go bankrupt?
If the moratorium is lifted or the project is not confirmed, and the debtor is subject to bankruptcy and the conditions are met, the court may declare bankruptcy on its own motion. This is why a realistic project matters before filing.
Is postponement of bankruptcy still available?
No. Postponement of bankruptcy (iflasın ertelenmesi) was abolished in 2018 and replaced by the reformed concordat.
This article is for general information only and is not legal advice. Every case must be assessed on its own facts. It reflects Turkish law as of the publication date.