An Advice To Those Having Debts

Almighty Allah Ta'ala states in the Noble Qur'an:

"Oh you who believe, Do not eat your wealth among yourselves unjustly, except that it be a transaction with mutual happiness." (Surah An-Nisaa: Ayat 29).

The prohibition of unjustly eating the wealth of others includes dishonouring a debt. Allah Ta'ala and Rasulullah SAW have announced serious warnings and punishments for dishonouring debts.

Consider the following quotations:

"And whosoever does that (unjustly eats the wealth of others), We will soon burn him in the fire" (Ibid).

Abdullah Ibn Umar RA narrates that Rasulullah SAW said every sin of a Shahid (martyr) is forgiven but (his) debts. (Mishkaat)

Abu Hurairah RA narrates that Rasulullah SAW said:

"The soul of a believer will be suspended (from entering Jannah) due to his debt until paid." (Ibid)

Abu Hurairah RA narrates that when the Janazah of a deceased who was in debts used to be brought to Rasulullah SAW, he used to enquire whether the deceased had left moneys in his estate or not; if there were moneys (to honour the debts) then only would he perform the Janazah (solat)." (Ibid)

Abu Hurairah RA narrates that Rasulullah SAW said:

"The (undue) delay of a wealthy person in paying his debts is oppression." (Mishkaat)

In an Islamic State, it is the responsibility of the ruler to secure payments of debts. If a debtor has some wealth, the ruler will imprison him until he sells his belongings - in order to honour his debts. (Raddul Mukhtar).

If he refuses to sell his belongings, the ruler will then himself sell all his belongings and distribute it to the creditors pro-rata their debts. The ruler may leave only one set of clothing for the debtor to cover his body (Hidayah).

The ruler even has the right to take all his (debtor's) cash and pay the creditors without the consent of the debtor. (Ibid)

Rasulullah SAW said that the person with the right (creditor) has a hand and tongue.

The hand and the tongue in the above hadith refers to the constant demand of the creditor for the payment of the debt. The creditors have the right to take the earnings of the insolvent debtor and divide it among all creditors. (Hidayah, Ibid)

From the aforegoing, it is clear that the rules and principles of insolvency in the secular system does not corroborate with the laws and principles of insolvency in Shariah. It is not permissible to search and create a loophole in the legal system and declare oneself insolvent in order to avoid payments to one's creditors. That will be regarded as oppression and a major sin. If the debtor still owns a house, cars, etc., according to Shariah he is not an insolvent person. He should sell his belongings, car, house etc., and honour his debts.

However, if a person is honestly insolvent, he should seek the forgiveness of his creditor and make every attempt to pay the debt. He should also record the debt in his will. Rasulullah SAW also advised the creditor to be lenient to his debtors. If possible he should grant respite for late payments or remit the entire or part of his debt. Rasulullah SAW even informed us of a creditor being forgiven by Allah Ta'ala for his sins due to his leniency to his debtors.

As Muslims we should be conscious of our accountability in the court of Allah Ta'ala and be truthful in all our dealings.