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Fatwa ID: 84178
Title: Settling my debt!
Category: Uncategorized
Scholar: Mohammad Said Mitwally Ibrahim, Ph.D.
Date: 04/07/2011

Question

I have a credit card dept of 10k + this was accumulated before I became a Muslim. I don't think I will be able to pay this off, I make minimum wage and my interest rates are high. Can I give certain material things away for charity in order to settle my dept in order to appease god.


Answer

First of all, a Muslim is supposed to avoid any transaction that includes usurious interest.  This is because a war will be waged by Allah against those who devour or deal with interest. Even if you are involved in a contract that includes a condition or an agreement to pay interest, you are not supposed to pay it as long as it is a violation to Islam. You are supposed to only pay the amount of debt you owe devoid of any interest. In your case, if you are completely incapable of settling your debts you may file bankruptcy. In this case your creditor will appropriately take their respective dues and forgive you for the rest. This transaction is legally permissible according to Islam. On the authority of Ka'b b. Malik that the Prophet (peace be upon him) declared the bankruptcy of Mu'adh b. Jabal and sold all his property for settling his debts. (It is related by al-Bayhaqy and al-Tabarany. It is authenticated by al-Hakim and others in addition to being substantiated by virtue of another hadith reported by sahih Muslim).