Question :

The Answer :

All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon Prophet Mohammad and upon all his family and companions.  After reviewing the regulations and activities of debt settlement companies, it has become clear that these companies work on renegotiating, settling, or altering the terms of their clients' debts. This is usually done by negotiating with creditors to waive a significant portion of the debt, and the company charges the debtor a fee for its services. The ruling on this type of work varies depending on its nature; If the company restructures the client’s debts in return for an increase on the principal amount, or sells the debts to other creditors, then this is prohibited because it involves assisting in something unlawful. Allah The Exalted Says (What means): "Help one another in righteousness and piety, but do not help one another in sin and transgression. And fear Allah. Indeed, Allah is severe in punishment." [Al-Ma’idah/2].                                                                                                                                                                  However, if the company renegotiates with creditors to reduce the debts owed by the debtors, then this is considered a paid agency (Wakālah Bi Ujrah), and there is no religious objection to it. However, it is important to ensure that the company’s legal status is sound and that it does not engage in fraud or deceit.                                                                        In conclusion, if the company restructures customers’ debts in exchange for an increase over the original amount, or sells the debts to other creditors, then working in such a company is prohibited, as it involves assistance in prohibited transactions. However, if the company’s work is limited to renegotiating with creditors to reduce the debts, then there is no objection to working in it from a Sharia perspective. However, it is important to ensure that the company’s legal status is sound and that it does not engage in fraud or deceit. And Allah The Almighty Knows Best.