How to Collect an Overdue Promissory Note?

A promissory note, which serves as a document showing debt, involves two parties: the creditor and the debtor. When creating a promissory note, it is important to specify a due date, and these notes must be paid on the specified date. According to the Turkish Commercial Code, negotiable instruments are classified into three types: checks, promissory notes (bono), and bills of exchange. Once signed between the parties, a promissory note does not require notarization to remain valid. The key point is that the notes must be properly prepared according to their nature.

Promissory notes can be collected in two ways: either in person on the due date or via a bank. According to the law, promissory notes must be paid within two business days of the due date. If they are not collected within this time, legal action can be taken to collect unpaid notes.

How to Collect Unprotested Promissory Notes?

What happens if the protest period for a promissory note expires? How can expired promissory notes be collected? Here are the details.

Collection Period for Overdue Promissory Notes

Unpaid promissory notes are a concern for many debtors and creditors. Promissory notes are widely used as a significant payment tool in commercial life. The primary debtor of a promissory note is the person who issues it. The expiration of the due date does not prevent the collection of the note. If the payment is not made, a non-payment protest must be issued to officially record the non-payment. The protest period for a promissory note is two business days following the due date. For promissory notes payable on demand, the protest period is one year from the date of issue. Promissory notes without a specified due date must also be protested within one year of their issuance.

How Long is a Promissory Note Valid in Enforcement?

Does a promissory note expire, and can it still be enforced after the expiration period? If a promissory note is not paid within three years from the due date, it becomes subject to the statute of limitations. However, this does not prevent its collection. Notes that have expired lose their negotiable instrument status and cannot be enforced through negotiable instrument proceedings. They can, however, be subject to non-executory legal proceedings. In this case, the debtor can object to the note, claiming no debt, which may result in the suspension of proceedings.

The expiration of the three-year period does not mean that you cannot initiate enforcement proceedings. The general statute of limitations is ten years. Within the first three years, the enforcement method is attachment proceedings specific to negotiable instruments. The debtor's objection does not stop the attachment process. However, if the debtor objects after three years, the enforcement process halts. In such cases, the creditor must apply to the court to overturn the objection and prove their claim; otherwise, the debtor's objection will not be dismissed.

Manage Your Promissory Notes Easily with Semosis!

With the digital promissory note platform Semosis, you can easily track the due dates of your promissory notes and collect payments online 24/7, regardless of time and location.