Fatwa n° 977

Category: Fatwas about financial transactions- Loan and Exchange

The ruling regarding the person being
unable to pay off [his debts]

Question:

Is it permissible for a person whose debts are accumulated and has no means to repay them to get a loan from the bank? May Allah reward you.

Answer:

All praise is due to Allah, the Lord of the Worlds. Peace and blessing be upon whom Allah sent as a mercy to the Worlds, upon his Family, his Companions and his Brothers until the Day of Resurrection:

As long as the debtor is insolvent and has difficulty in paying his loans off, then he is obliged- when the creditors ask to repay the loans and do not pardon them- to extract the additional money that exceeds his need and his family’s to repay the debts and leave only the necessary for livelihood. But, if he fails to repay them, the creditors have to wait until he will be in easy financial circumstances, for Allah تعالى says:

﴿وَإِن كَانَ ذُو عُسۡرَةٖ فَنَظِرَةٌ إِلَىٰ مَيۡسَرَةٖۚ وَأَن تَصَدَّقُواْ خَيۡرٞ لَّكُمۡ إِن كُنتُمۡ تَعۡلَمُونَ ٢٨٠﴾ [البقرة: 280.[

The meaning of the verse:

﴾ And if someone is in hardship, then [let there be] postponement until [a time] ease. But if you give [from your right as] charity, then it is better for you, if you only knew﴿ [Al-Baqara: 280]. Indeed, every person who is in hardship should be allowed deferment [till his ease]. Furthermore, Muslim reported from the hadith of Abû Sa‘îd Al-Khudrî رضي الله عنه who said: “In the time of Allah's Messenger صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ a man suffered loss in fruits he had bought and his debt increased; so Allah's Messenger صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ told (the people) to give him charity and they gave him charity, but that was not enough to pay the debt in full, whereupon Allah's Messenger صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ said to his creditors: “Take what you find, you will have nothing but that”.⁽¹⁾.

However, this ruling concerns the case of the person who has no money and of explicit poverty. What has to be done -in this situation- is postponement and waiting time of ease of the debtor. Allah عزّ وجلّ recommended in the previous verse to give charity to the insolvent debtor and made that better than postponing him. Rather, he is counted -with this consideration- among the poor debtors who deserve the obligatory charity [Zakât]. Therefore, the person should not resort to the bank to repay his loans because Sharî‘a (Islamic law) blocked all ways [that lead] to what is prohibited. In addition, the bank does not add to the debtor but worry and grief with its usurious loan and the bank will be added -at the end- to the list of his creditors.

Finally, you have to strive and fear Allah تعالى indeed:

﴿وَمَن يَتَّقِ ٱللَّهَ يَجۡعَل لَّهُۥ مَخۡرَجٗا ٢ وَيَرۡزُقۡهُ مِنۡ حَيۡثُ لَا يَحۡتَسِبُۚ وَمَن يَتَوَكَّلۡ عَلَى ٱللَّهِ فَهُوَ حَسۡبُهُۥٓۚ إِنَّ ٱللَّهَ بَٰلِغُ أَمۡرِهِۦۚ قَدۡ جَعَلَ ٱللَّهُ لِكُلِّ شَيۡءٖ قَدۡرٗا ٣﴾ [الطلاق: 2-3].

The meaning of the verse:

﴾ And whoever fears Allah, He will make for him a way out. And will provide for him from where he does not expect. And whoever relies upon Allah, then He is sufficient for him. Indeed, Allah will accomplish His purpose. Allah has already set for everything a [decreed] extent ﴿ [At-Talâq: 2-3].

We supplicate Allah to open for you the doors of good and blessings and to grant you enough of what He makes lawful so that you may dispense with what He makes unlawful.

The perfect knowledge belongs to Allah عزَّ وجلَّ; and our last prayer is all the praises and thanks are to Allah, the Lord of the Worlds, and prayers of Allah are to Muhammad and his Family, Companions and Brothers until the Day of Resurrection.

Algiers on: Muharram 23^rd, 1430 H

Corresponding to January the 20^th, 2009 G.