Debt restructuring guide in 10 questions

The questions people are curious about regarding the Restructuring Law, which entered into force upon publication in the Official Gazette, have been put under the microscope. Interest and penalties on retirement contribution, insurance and support premium debts, which concern millions, are being recalculated. Applications will continue until 31 August. No collateral will be required in the restructuring, and seizures will be lifted.

To benefit from the restructuring, it is necessary to apply by the end of 31 August and to pay the first instalment by 1 November at the latest. If the principal of the general health insurance premium debt is paid by 31 December, the entire late payment penalty and surcharge will be cancelled. No collateral will be required in the restructuring, and seizures will be lifted.

1- WHICH DEBTS DOES THE RESTRUCTURING COVER?

Debts relating to finalised insurance premiums, General Health Insurance (GSS) premiums and unemployment insurance premiums for April and earlier periods, receivables arising from the reinstatement of frozen service periods of Bağ-Kur insured persons, and voluntary and group insurance premiums will be restructured.

2- HOW AND WHERE ARE APPLICATIONS MADE?

Employers may apply to social security centres via the e-insurance channel, in person or by post; Bağ-Kur insured persons and those who pay their own premiums may apply to any social security centre via e-Government, in person or by post. There is no application requirement for the restructuring of General Health Insurance debts.

3- WHAT ARE THE ADVANTAGES OF THE RESTRUCTURING?

No late payment penalty or surcharge will be applied, after the publication date of the law, to receivables paid on time. Seizures applied before the restructuring will be lifted in proportion to the payments made. No enforcement proceedings or seizure procedures will be carried out due to the debts. A 'no debt' certificate can be obtained if two instalments are paid on time. The restructured debts of municipalities may be paid in 120 equal instalments. As long as the restructuring continues, insurance premium incentive schemes will be available provided that the instalments are paid on time.

4- IN WHICH CASES DOES THE RESTRUCTURING BECOME VOID?

The restructuring will become void if the first two instalments are not paid on time, or if more than two instalments in a calendar year are not paid or are underpaid. In instalment payments, underpayments of up to 10 lira will not void the restructuring. If the restructuring becomes void, debtors will be able to benefit from the restructuring provisions to the extent of the instalment amounts they have paid.

5- HOW WILL GSS DEBTS BE RESTRUCTURED?

GSS debts for April 2021 and earlier will be restructured automatically. If the entire principal debt is paid by 31 December, the late payment penalty relating to this debt will be cancelled. Those who missed the one-month period required for the income test, or who have never had an income test and are unable to pay their debt, must apply for an income test by 30 November. Upon application, the debts of citizens whose income is found to be below one third of the minimum wage will be cancelled and their premiums will be paid by the state. Automatically restructured GSS debts can be viewed via e-Government.

6- HOW WILL PAYMENT AND INSTALMENTS WORK?Receivables will be updated with the D-PPI instead of the late payment penalty and surcharge. In advance payment 90 percent, and in payment in two instalments 50 percent, will be cancelled. In instalment payment, payment may be made in 6, 9, 12 and 18 equal instalments in two-month periods. The amount to be updated according to the number of instalments will be determined according to the following coefficients: "for 6 equal instalments (1.09), for 9 equal instalments (1.135), for 12 equal instalments (1.18), for 18 equal instalments (1.27).