Darul Ifta Ibn Masood

Liquidating one’s business to escape creditors

· 3 Rajab 1445 AH1 min readEnglish

Question

My father’s business is financially struggling as has consequently incurred a number of debts. If he changes the business name, and liquidates the previous business, will his income be Halaal?

Answer

By liquidating the business and changing the business name, the debt does not fall away. A person will be responsible in the court of Allah Ta’ala for his outstanding debts even though the creditor may be a Kaafir. The debtor should therefore make arrangements to settle his debts even if it means settling the debts in instalments over a period of time if he is unable to settle it immediately.

It is recorded in the Hadith Sharif that a Mujahid that sacrifices his life whilst fighting in the path of Allah will attain Jannah except if he leaves behind a debt, hence one should settle his outstanding debts as soon as possible.

References (Arabic / Urdu sources)

عَنْ عَبْدِ اللَّهِ بْنِ جَحْشٍ: أَنَّ رَجُلًا جَاءَ إِلَى النَّبِيِّ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ، فَقَالَ: يَا رَسُولَ اللَّهِ: مَا لِي إِنْ قُتِلْتُ فِي سَبِيلِ اللَّهِ؟ قَالَ: الْجَنَّةُ، فَلَمَّا وَلَّى، قَالَ: إِلَّا الدَّيْنَ، سَارَّنِي بِهِ جِبْرِيلُ آنِفًا. (شرح الطحاوي الارناووط ص585 ج2)

عَنْ أَبِي هُرَيْرَةَ، أَنَّ رَسُولَ اللهِ صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ، قَامَ فَخَطَبَ النَّاسَ، فَذَكَرَ (2) أَنَّ الْإِيمَانَ بِاللهِ وَالْجِهَادَ فِي سَبِيلِ اللهِ مِنْ أَفْضَلِ الْأَعْمَالِ عِنْدَ اللهِ، فَقَامَ رَجُلٌ، فَقَالَ: يَا رَسُولَ اللهِ، إِنْ قُتِلْتُ فِي سَبِيلِ اللهِ، وَأَنَا صَابِرٌ مُحْتَسِبٌ، مُقْبِلٌ غَيْرُ مُدْبِرٍ، يُكَفِّرُ اللهُ عَنِّي خَطَايَايَ؟ قَالَ: ” نَعَمْ، فَكَيْفَ قُلْتَ؟ ” قَالَ: إِنْ قُتِلْتُ فِي سَبِيلِ اللهِ، وَأَنَا صَابِرٌ مُحْتَسِبٌ، مُقْبِلٌ غَيْرُ مُدْبِرٍ، يُكَفِّرُ اللهُ عَنِّي خَطَايَايَ؟ قَالَ: ” نَعَمْ، كَيْفَ قُلْتَ؟ ” قَالَ: إِنْ قُتِلْتُ فِي سَبِيلِ اللهِ، وَأَنَا صَابِرٌ مُحْتَسِبٌ، مُقْبِلٌ غَيْرَ مُدْبِرٍ، يُكَفِّرُ اللهُ عَنِّي خَطَايَايَ؟ قَالَ: ” نَعَمْ، إِلَّا الدَّيْنَ، فَإِنَّ جِبْرِيلَ سَارَّنِي بِذَلِكَ ” (مسند احمد ص106 ج14)

Answered by
Mufti Mohammed Desai
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Source: Darul Ifta Ibn Masood — https://fataawa.co.za/liquidating-ones-business-to-escape-creditors/
Fatawa SA: https://fatawa.co.za/fatwa/ibnmasood-29464

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