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Resolutions of Iftaa' Board

Resolution No.(255): "Ruling on Waving/Forgiving a Portion of Debt against early Settlement"

Date Added : 15-05-2018

Resolution No.(255)(8/2018)  by the Board of Iftaa`, Research and Islamic Studies

"Ruling on Waving/Forgiving  a Portion of Debt against early Settlement"

Date: 3/Sha`ban/1439 AH, corresponding to 19/4/2018.

All perfect praise be to Allah, The Lord of The Worlds, and may His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

During its fifth session held on the above date, the Board reviewed the letter sent from the Minister of Awqaf, Holy Sites and Islamic Affairs, Dr. Abdulnaser Abulbasal, and it read as follows:

Could your grace approve of presenting what Muslim jurists call "Da`wa Ta`ajjal" {i.e. when the creditors "waive or forgive" a portion of the debt in return for early settlement of the rest of the money} and the mechanism  of its application to the Iftaa` Council, and consider the potential of its applicability on Islamic finances granted by the Hajj Fund.

After deliberating, the Board decided what follows:

Waiving a portion of debt in what`s called "Debt Contracts" in return for early settlement is called by Muslim jurists "Da` wa Ta`ajjal" i.e. when the creditors "waive or forgive" a portion of the debt in return for early settlement of the rest of the money." In this regard, there are five cases:

First: Waiving a portion of debt is conditioned in the original contract. In this case, this is considered Riba (interest and/or usury). It is like making two transactions combined in one bargain, and this is forbidden since The Prophet (PBUH) said: "If anyone makes two transactions combined in one bargain, he should have the lesser of the two or it will involve usury." {Related by Abi Dawud}.

Second: Waiving a portion of the debt against early settlement of the rest of the money is agreed upon after having concluded the original contract. In fact, the majority of the Muslim scholars have forbidden this based on the preponderant opinion of the four schools of thought.

On the other hand, Ibn Abbas, may Allah bless them both, Al-Nokha`i, Ibn Serene and Zufar permitted waving a portion of the debt against early settlement of the rest of the money based on the narration of Ibn Abbas (May Allah Be Pleased with them) narrated: "Where it is stated that when the Prophet (PBUH) wanted to make Bani An-Nadeer leave Madinah, they said to him: "O` Messenger of Allah! You ordered us to leave although we haven`t collected our money from debtors because the time of settlement isn`t due yet." He (PBUH) said: "Da`oo wa Ta`ajjaloo" i.e. "waive or forgive" a portion of that debt in return for immediate settlement of the rest of your money by debtors." {Related by Al-Hakim, but Al-Baihaqi considered it a weak narration}. Because usury is addition against delay in settlement, it totally harms the debtor and differs from "Da`oo wa Ta`ajjaloo" where both parties (Creditor and debtor) benefit from that transaction. The latter view was adopted by the International Islamic Fiqh academy in its resolution No. (66), but stipulated that no prior agreement was reached to that end.

Third: The waiving pertains to the debts which the debtor has failed to settle on time. In this case, it is permissible to waive/forgive a portion of that debt against early settlement of the rest of the money in order to be cleared from the debt.

Fourth: The waiving wasn`t conditioned by the contracting parties; rather, it was a donation/gift from the creditor because the debtor had settled the rest of the money or the deferred payments earlier than agreed in the original contract.

Resolution No.(61) of the Iftaa` Board stated: "It is permissible for the bank to relieve the (Asker) from a portion of the value of the Murabaha, as it sees fit, taking into account the special circumstances that he is experiencing. This is provided that this waiver isn`t a regular practice of the bank or was conditioned in the Murabaha contract in the first place……"

Fifth: It is permissible for the debtor to give the creditor a commodity against his debt, even if its value was less than that of the debt, and this was permitted by the majority of the Muslim scholars. For further details, please refer to the books {Bedayat Al-Mojtahid by Ibn Roshd & Al-Qawaneen Al-Fiqhia by Ibn Al-Jazzi}.

In conclusion, waiving/forgiving a portion of the deferred debt, upon request of debtor or creditor, in return for early settlement of the rest of the money is permissible, and isn`t Riba so long as it wasn`t conditioned in the original contract. And Allah Knows Best.

Chairman of Iftaa` Board,

Grand Mufti of Jordan,

Dr. Mohammad Al-Khalayleh

Sheikh Abdulkareem Al-Khasawneh, Member

Dr. Ahmad Al-Hasanat, Member

Dr. Majid Darawsheh, Member

Sheikh Sa`eid Al-Hijjawi, Member

Judge Khalid Woraikat, Member

Dr. Mohammad Al-Zou`bi/ Member

Prof. Abdullah Al-Fawaaz/ Member

 

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Summarized Fatawaa

What is the ruling on Zakat al-Fitr?

Zakat al-Fitr is obligatory upon every Muslim for themselves and for those they are financially responsible for, provided they possess wealth that is surplus to their and their family's needs on the night and day of Eid.
Ibn Umar reported: "The Messenger of Allah ﷺ made Zakat al-Fitr obligatory—one sa‘ (measure) of dates or one sa‘ of barley—upon every Muslim, whether slave or free, male or female, young or old." [Narrated by Al-Bukhari]
Its estimated amount is approximately 2,500 grams of wheat or rice, and the General Iftaa` Department issues an annual ruling specifying its monetary value.

What is the ruling on waiving a debt owed by a debtor and counting it toward zakāh?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah ﷺ.
Waiving a debt owed by a debtor, with the intention of counting it toward zakāh, does not fulfill the zakāh obligation. Rather, it constitutes an ordinary act of charity, for which Allah rewards the giver generously — since one of the conditions for the validity of zakāh is that the person paying it must form the intention of zakāh at the actual moment the wealth is paid out. In this case, the debt has already been established as a standing obligation upon the borrower, so it is not valid to simply redirect the intention toward zakāh after the fact.
It is preferable, instead, for the creditor to first collect the debt from the debtor, and then return to him the amount of money he is required to pay as zakāh — or a portion of it — if the debtor happens to fall under one of the eight categories that Allah, the Exalted, has commanded be given from zakāh.
It is stated in ‘Umdat as-Sālik, from the books of the Shāfi‘ī school: "If someone gives [money] to a poor person, stipulating that the recipient return it to him in payment of a debt owed to him, or says, 'I am making what you owe me into zakāh, so take it [as such]' — this is not valid. But if he gives it to him with the [unstated] intention that the recipient will use it to repay him, or says, 'Repay what you owe me, so that I may [then separately] give it to you as zakāh,' or the debtor himself says, 'Give it to me, so that I may [then] repay you with it' — this is valid, and there is no binding obligation for the recipient to actually fulfill this [informal understanding]." And Allah, the Exalted, knows best.

Who is responsible for performing the aqiqah?

All praise is due to Allah, and may peace and blessings be upon our Master, the Messenger of Allah.
The one upon whom the 'aqīqah is incumbent is whoever is obligated to financially maintain the newborn — whether the father, paternal grandfather, or mother. It is to be performed from their own wealth, not from the wealth of the newborn child.
As for one upon whom the financial maintenance of the newborn is not obligatory, they may not perform the 'aqīqah except with the permission of the one upon whom it is obligatory — namely, the father. And Allah Almighty knows best.

Is an elderly or chronically ill person required to pay additional fidyah if they delay it beyond the first year?

An elderly person or someone permanently unable to fast must pay fidyah by feeding one needy person for each missed day.
However, if they delay paying fidyah beyond the first year, no additional fidyah is required.
This differs from someone who delays making up missed Ramadan fasts (qada) without a valid excuse until the next Ramadan begins—such a person is required to pay an additional fidyah for the delay.

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