AAOIFI Shariah Standards

Procrastinating Debtor: Appendix B - The Shariah Basis for the Standard

Default on the Part of a Debtor

The debtor must settle his debt when it is due. Default in payment by The debtor must settle his debt when it is due. Default in payment by a debtor who is able to settle the debt is prohibited. The Prophet (peace a debtor who is able to settle the debt is prohibited. The Prophet (peace be upon him) says: “Default in payment on the part of a solvent debtor is unjust.” also says: Delay in payment by a solvent “Delay in payment by a solvent debtor would be a legal ground for his being publicly dishonoured and punished.”.” Moreover, he (peace be upon him) approved the statement of Salman Al-Farisi to Abu Al-Darda` saying: “Give everyone his right.”of Salman Al-Farisi to Abu Al-Darda` saying: “Give everyone his right.” Muslim scholars have agreed on the permissibility of a debtor being punished in such circumstancesHowever, an insolvent debtor should be granted a grace period.be granted a grace period.

« Appendix A - Brief History of the Preparation of the Standard Settlement of Debts by Set-Off: Scope & Shariah Ruling »


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