Set-Off and Allocation of Claims

Having a claim against the person demanding payment does not necessarily mean the debts automatically end. Set-off conditions, the claims' types and maturity, and the declaration must be examined together. Accounting allocation and legally valid set-off are not always identical.

How Are Reciprocal Claims Compared?

The general rules in Articles 139 et seq. of the Turkish Code of Obligations require reciprocal monetary or same-kind obligations and relevant conditions. A disputed claim does not entirely prevent consideration of set-off. However, a claim against a third party cannot ordinarily be set off against a debt owed to someone else. Assignment, joint and several liability, and bankruptcy require assessment of special rules.

The Declaration and Its Limits

The intention to set off must be notified to the other party. The claims and amount covered must be clear. Special claims such as maintenance and wages have statutory limits. Set-off of a time-barred claim may depend on when the claims first became eligible for set-off. An old invoice therefore does not mean every current debt can be deducted from it.

Account Review in Litigation and Enforcement

Principal, interest, payments, and set-off items must be shown separately. Timing and procedure for the defence must be examined with the file's stage. Contractual prohibitions or earlier waivers must also be reviewed. We match reciprocal accounts to documents and assess undisputed and disputed items separately.

Documents That May Be Prepared for the Initial Review

• Contracts and invoices for both claims
• Maturity and payment records
• The set-off notice
• Earlier account reconciliations

Submit Your Matter

File review and representation are paid services. Scope and fees are agreed in writing before work begins.