Glossary
Debt Restructuring in Türkiye: Types, Steps and Concordat
Debt beyond the ability to pay is often a timing problem. Debt restructuring means redistributing payments according to the business’s real capacity to generate cash.
Common instruments
| Instrument | What it provides |
|---|---|
| Maturity extension | Smaller instalments, lower monthly cash burden |
| Interest reduction or fixing | Lower cost |
| Grace period | Interest only, or no payment, in the first months |
| Change of security | Rearranging pledge or guarantee conditions |
| Partial release of debt | The creditor gives up part of its claim by agreement |
| Debt-to-equity conversion | Shares are issued instead of debt |
With whom is it done?
- Banks: A restructuring request is received more favourably if supported by a credible cash plan and an improvement project.
- Suppliers: Deferred payment and instalment protocols.
- Public authorities: Time-limited statutory options for tax and social security.
Steps
- Establish the real position: All debts, maturities and security.
- Calculate the ability to pay: With a 13-week cash forecast.
- Fix the cause: Profitability, collections or financing structure.
- Prepare scenarios and an offer: A plan you can really pay.
- Negotiate with creditors: Talking to all of them at the same time preserves trust.
- Implement and monitor: Keeping to the plan is the key to later negotiations.
Difference from concordat
Out-of-court restructuring is confidential, fast and cheap, but binds only creditors who agree. Concordat works under court supervision and, once confirmed, binds dissenting creditors as well. For comparisons see Concordat or financial restructuring? and Concordat vs bankruptcy.
How Denova can help
In our Financial Restructuring service we manage analysis, planning, negotiation and implementation together, and assess the legal consequences of every protocol before it is signed.
Frequently asked questions
When should debt restructuring be considered?
When loan instalments start being paid with new loans, when cheques and notes are covered at the last minute, or when banks narrow limits. Starting before delays grow preserves negotiating strength.
Can public debts also be restructured?
For tax and social security debts, restructuring options are introduced by law in some periods. They are time-limited and conditional. Check the relevant authority's announcements and the legislation for what is currently available.
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.