Q146 :I gave money on loan to a friend for a
specified period of time. When the payment was due, my friend, though
acknowledging the debt, claimed that he was not in a position to pay.
What sort of sanctions has Islam prescribed in such a situation? Am I
entitled to any netpensation for late payment?
A146 : When a case of unpaid debts is referred to
an Islamic court, the judge is required to look at the financial
position of the debtor. If he finds out that debtor appears to have
money in hand, he will order him to repay immediately. If he refuses,
the judge may order that he be imprisoned until he has paid his debts.
If, however, he claims to be insolvent, the lender is required to wait
until he has funds to repay. This is not something that he does by
choice. Order to delay payment in such cases is given by Allah in the
Qur’an. If the lender foregoes his money in such a case, he will be
highly rewarded by Allah, and the reward will outweigh by far the
benefit he may receive from regaining the money he had lent. Such an
action of forgoing an unpaid debt because of the insolvency of the
debtor must be voluntary. No pressure needs to be placed on the lender
to relinquish his rights. I should perhaps remind you that an
insolvent debtor is one of the beneficiaries of zakah. Islam recognizes
the difficulty of one who finds himself in a position when he cannot
repay his debts. The system of social security which Islam establishes
takes care of such people who may have tried hard not to get to such a
position. They are helped with zakah funds so that they are relieved of
the pressures of being in debt and unable to repay. Compensation to
the lender for late payment is unacceptable in Islam. It is akin to
usury which Islam strictly forbids. What is the difference between a
moneylender who determines beforehand that he will receive a certain
amount or percentage over and above the amount he has lent, and one who
exacts a financial punishment for late payments? Perhaps I should add
that lending to a person in need is an act of kindness. Therefore, you
must not waste your reward which you are sure to have from Allah by
insisting on having netpensation for the late payment, especially if
the borrower is truly insolvent.
Our Dialogue ( Source : Arab News – Jeddah )