Succession refers to the situation where a third party who pays a debt becomes the holder of the primary and secondary rights of the creditor arising from the debt relationship. In such cases, the debt is not extinguished by the third party’s performance but passes to the third party who performed under the law. The third party takes the place of the creditor, that is, becomes the creditor’s successor. In a debt transaction, there is a third party who acts as the creditor of the debtor. Subsequently, the debtor becomes the third party who takes the creditor’s place. Subrogation is an exceptional circumstance; that is, it is not applicable in every situation. Subrogation arises from the debtor’s
will or a provision of law.
Article 127 of the Turkish Code of Obligations sets forth the circumstances under which this may occur:
“In the following cases, a third party who performs the obligation to the creditor assumes the creditor’s rights to the extent of the performance:
Recovering an item pledged as security for another’s debt and
the situation where the third party holds ownership or other real rights to such item.
If the third party who will perform the obligation to the creditor is to succeed the debtor, the debtor’s performance
must be notified to the creditor in advance.
The provisions of the law regarding other subrogation situations remain reserved.”
Consequences of subrogation:
As a result of the subrogation; the debtor will be released from the debt owed to the creditor to the extent of the third party’s performance.
The third party takes the creditor’s place; the third party who performs the obligation will take the creditor’s place. Thereafter, the debtor will be obligated to perform the debt to the successor third party. The debtor will be obligated to perform to the third party under the same form and conditions as those to which the creditor was entitled. The third party, as the successor to the security interests (pledge or suretyship) securing the claim, will also benefit from these.