Home / Islam / Finance and Economics / Muslim’s Guide to Debt and Money Management Part 2

Muslim’s Guide to Debt and Money Management Part 2

(Read Intro and Part 1 before proceeding)

Debt Perceptions – Islamic View of Debt

Even a brief review of basic literature in Islam regarding debt shows that it is unequivocally discouraged. Period. Debt.Is.Bad.

The general principles in Islam include only buying what you actually have money for, agreeing to a fixed price before purchase, and, oh yes, avoiding interest! Allāh (swt) said in Surah al-Baqarah that HE DECLARES WAR on those who deal with interest. That 8.9% APR is hell on an installment plan. Would you like that paid out over 24, 36, or 48 months?

Did you know? The longest āyah in the Qurʾān is the āyah of debt (2:282).

It is narrated in Bukhāri and Muslim that one of the du‘ā’'s the Prophet (saw) used to make at the end of every ṣalāh was seeking refuge in Allāh from heavy debt. Someone said to him, “How often you seek refuge from heavy debt!” He said,

“When a man gets into debt, he speak and tells lies, and he makes a promise and breaks it.”
In Sunan an-Nasa'ee this hadith is narrated,

We were sitting with the Messenger of Allāh (peace and blessings of Allāh be upon him) when he raised his head towards the sky, then he put his palm on his forehead and said: “Subhaan-Allāh! What a strict issue has been revealed to me!” We remained silent and were afraid. The following morning I asked him, “O Messenger of Allāh, what is this strict issue that has been revealed?” He said, “By the One in Whose hand is my soul, if a man were killed in battle for the sake of Allāh, then brought back to life, then killed and brought back to life again, then killed, and he owed a debt, he would not enter Paradise until his debt was paid off.”

We know the immense rewards of the shaheed, so imagine that even these rewards are withheld for the one who dies with debt.

In Tirmidhi a hadith is narrated that,

“Whoever dies free from three things – arrogance, cheating and debt – will enter Paradise.”

In a chilling narration from Musannaf Abdur-Razzaq, ibn Umar (ra) said,

Fear Allāh and do not die in debt, lest it be taken from your good deeds when there will be no dinars and no dirhams.

Imām Qurtubi made the following statement about debts,

Our scholars said: It is a disgrace and a humiliation because it preoccupies the mind and makes one worried about paying it off, and makes one feel humiliated before the lender when meeting him, and feeling that he is doing one a favor when accepting a delay in payment. Perhaps he may promise himself that he will pay it off then break that promise, or speak to the lender and lie to him, or swear an oath to him then break it, and so on. Moreover, he may die without having paid off the debt so he will be held hostage because of it, as the Prophet (peace and blessings of Allāh be upon him) said: “The soul of the believer is held hostage by his debt in his grave until it is paid off.” All of that undermines one's religious commitment.

For more information similar to what is above, please refer to 'Seriousness of Debt' at Islam-QA.

The main lesson we learn is that Islam has discouraged debt as much as possible, and that debt is something that has a serious and direct effect on one's īmān.

One thing that must also be mentioned is what actually comes before debt in Islam, and that is the belief that Allāh (swt) is Ar-Razzaq. He alone sustains us, so we should depend upon Him for our needs, and not turn to what is Haram. Inshā'Allāh this will be covered in more detail in a later post on why Muslims are in debt, but it's important to take note of this point for now.

When a Muslim falls into the credit card trap, or into major debt, they do not realize the ramifications of it. Islamically speaking, it has the potential to corrupt a person's most basic forms of sustenance. In two different hadith, the Prophet (saw) mentioned,

“No one ever eats any food better than that which he has earned with his own hands. The Prophet of Allāh Dawood (peace be upon him) ate that which he earned with his own hands” (Bukhāri).

And,

“If one of you were to take a rope and bring firewood on his back and sell it, thus preserving his dignity, that is better for him than asking of people who may give to him or withhold from him” (Bukhāri)

When a Muslim falls into the trap of buying things on a credit card, it is quite possible that he is even purchasing the food he feeds his family on money that is tainted with ribaa. This is because the hard earned money is no long being cashed out to meet your needs, but is going out before you get it to catch up on the monthly payments that are due.

A person may now have a halal job, but by his wealth being spent in ribaa, and his food and drink now being bought on ribaa, this person is now under the threat of having his supplications rejected for sustaining himself with haram – despite the fact that his job itself may well be halal.

The fact that the Prophet (saw) sought refuge in it so regularly (as regularly as he prayed!!) should be enough of a warning to us to not be involved in debts.

The ramifications outlined as consequences above hold true to this day. Think about something as simple as lying to your parents, or your spouse, or siblings regarding your financial situation. This is especially the case for seemingly 'well off' Muslims who may be concealing debt, embarrassed to know that they are living in a 300k house, driving a Lexus, yet, due to their debts they may not even have Zakat due on them!!!! [at least according to one opinion of the fuqahaa on this issue].

The greatest fear a Muslim should have though, is to die while being in debt, and thus being held hostage from entering paradise!

And remember, the warnings given here are for HALAL debts!! What then of haram debts?

Coming up next.. A detailed look at Americans in debt.

allaah allah ayah bukhari dua imaan imam insha'allah quran salah

About ibnabeeomar

Omar Usman is a founding member of MuslimMatters, Qalam Institute, Muslim Strategic Initiative, and Debt Free Muslims. He is a regular khateeb and has served in different administrative capacities in various national and local Islamic organizations. You can follow him on Google+ or on Twitter @ibnabeeomar.

25 comments

  1. Asalaamu alaikum, brother. This series has inspired me, jazakum Allah khair; last night I used a gift I recently received to pay off the full balance of a credit card. I have a fair amount of debt from back in the day when I wasn’t so concerned with Islamic values and I’ve been working to get it paid off. Your posts are very motivating. It’s also helped me think about financing the opening of my bookstore – it’s so tempting to take loans or use a 0% introductory APR credit card, but there can hardly be blessing in a well-intentioned project that doesn’t rely fully on the bounty of Allah to support it.

    Thumb up 0 Thumb down 0

  2. jazakiAllahu khayr!!

    also in the news today – countrywide, known for lending to ppl with poor credit, was on the brink of bankruptcy and got bought out by bank of america, surprise?

    http://money.cnn.com/2008/01/11/news/companies/boa_countrywide/index.htm?cnn=yes

    Thumb up 0 Thumb down 0

  3. very moving … it makes your realize 2 things…

    think 100 times before getting a halal mortgage…(just because its halal, doesn’t mean its good for you)

    how far the global economic system is from the right path that the only way to buy a house is through such painful debt

    Thumb up 0 Thumb down 0

  4. According to my teacher, whose expertise lies in financial issues (he is a scholar of Shari`ah and an MBA), the majority of what passes for halal mortgages are not halal either. You can listen to him in this set:

    http://www.dar-us-salam.com/store/main.mvc?Screen=PROD&Store_Code=Dus&Product_Code=MQ17&Category_Code=M_Family

    He’s been offered huge sums of money to give his endorsement to various Islamic financial institutions and has always refused

    Thumb up 0 Thumb down 0

  5. there will be a whole section on housebuying towards the end of the series (around the time when we get to student loans) :)

    Thumb up 0 Thumb down 0

  6. STUDENT LOANS!!! can we fast forward to this part already???

    Thumb up 0 Thumb down 0

  7. i agree with kd.

    i’m also *extremely* curious about halal investing (e.g., amana). most people i’ve spoken with are very skeptical about “islamic banking.” the clerk at my bank stopped me today for the very first time to alert me that i had about 99% of my money in my interest-free checking account. he was very concerned that i wasn’t earning interest and wanted me to speak with a banker!

    about mortgages, apparently guidance financial literally gives you a useless piece of paper that says you’re not paying them “interest,” but rather “commission.” it’s all the same thing behind the scenes…it’s like there are all these euphemisms now to halalify transactions.

    BUT, this is all i know. so i’m wondering if it’s true.

    jazakullah khair for this series. it’s so important for myself and my friends who are soon to be out of (private) grad schools.

    Thumb up 0 Thumb down 0

  8. all in due time inshallah

    Thumb up 0 Thumb down 0

  9. inexplicabletimelessness

    “STUDENT LOANS!!! can we fast forward to this part already???”

    totally agree. Mashallah on the articles so far though, they are very enlightening. Also, jazakAllah khair for the link brother Abu Bakr, I hope to listen to that lecture soon.

    Thumb up 0 Thumb down 0

  10. “By the One in Whose hand is my soul, if a man were killed in battle for the sake of Allaah, then brought back to life, then killed and brought back to life again, then killed, and he owed a debt, he would not enter Paradise until his debt was paid off.”

    Subhanallah! This hadeeth is so strong in its warning against debt. May Allah save us from Debt and Riba.

    Thumb up 0 Thumb down 0

  11. Subhanallah, very enlightening jazakallahukhayr for bringing this to attention

    Thumb up 0 Thumb down 0

  12. Salaam alaikum,

    I cannot wait to see the post on house buying and the apparent “halal” mortgages…we needed that like yesterday…jazakAllah khair.

    Thumb up 0 Thumb down 0

  13. salaams,

    is not paying a traffic citation considered a debt?

    i got a ticket for over $500!!!

    its a serious question…

    :)

    Thumb up 0 Thumb down 0

  14. Salaam walaikum brothers,

    I have heard a hadith somewhere before that the prophet (PBUH) said you should pay off your debts first and only once your debts are paid off you should then pay zakat. i am looking for this hadith, please could someone tell me where to find it.

    Jazakallah Kair

    Thumb up 0 Thumb down 0

  15. Hi, i am a muslim and have recently reverted bak to my deen, from jahilia i had a debt, of £30 for a stolen item, the person who sold me that item is also now on the deen alhamdulillah, however he still wants the money for the stolen item, is it haram for me to pay him, or is the debt still on me? I would like the answer with references to qur’an and hadith, thank you.

    Thumb up 0 Thumb down 0

  16. jazakallah khair, I was into bad habbits before therefore i had been in debts for long time. Even now i am vary careless about repaying debts (although i had almost repayed, part of debt still to be paid) i Know a little about prophet Mohammed (S.a.w) hadeeth regarding debts, but still i act as ignorant. Now i feel the bad effects of it in my daily life.
    After googling, i reach to your site and after reading, i m worried what will happen if i die with debts on me.
    Please pray for me.

    Thumb up 0 Thumb down 0

  17. May Allah reward you for this great article. Indeed taking debt is a greatest humiliation and person must avoid even thinking of taking debt. May allah save all  Muslims from this biggest humiliation.

    Thumb up 0 Thumb down 0

  18. Assalam walaikum.
    Jazakallah . For giving us info on dealimg with debt …may Allah reward u..and ur team.
    I was not aware of this site …it just happened like my friend questioned me if ….one could sell his organs to pay off his debt.
    When searched…. I found ur topic helpfull.
    Once again Jazakallah

    Thumb up 1 Thumb down 1

Leave a Reply

Scroll To Top