Saturday, February 28, 2015

Q&A: Debt Repayment after Currency Decreases

Question:
Assalamu alaikum, who bears the difference in currency if the debtor delayed the repayment of the debt to the creditor without excuse for ten years, for example, whether the debt is a wage or loan?
From Abu Yasser

Answer:
Wa Alaikum Assalam wa Rahmatullahi wa Barakatuh,
Liable fixed wages is like a debt, whoever owes a debt to another person, he must fulfil it according to the terms agreed between themselves. If the debtor delays in the payment of the debt, then it is considered: If he is in hardship, the creditor must respite him until his financial conditions improve and he is able to repay the debt, as the Almighty said,
عُسْرَةٍ فَنَظِرَةٌ إِلَى مَيْسَرَةٍ
"And if someone is in hardship, then [let there be] postponement until [a time of] ease."
(Al-Baqara: 280)وَإِنْ كَانَ ذُو 
But if the debtor is capable to fulfil his debt but refrains from paying it, he is forced to fulfil the debt, and if he does not then he would be punished, according to what Abu Dawood and Ibn Majah narrated from 'Amr bin Sharid from his father that the Messenger of Allah صلى الله عليه وسلم said:
«لَيُّ الْوَاجِدِ يُحِلُّ عِرْضَهُ وَعُقُوبَتَهُ»
"If one who can afford it delays repayment, his honor and punishment become permissible".
The meaning of "Lai Alwajd" in the Hadith is any procrastination of the rich, the meaning of his honor is permissible is to complain of him and rebuke him verbally, and the meaning of his punishment is his imprisonment and detention.
As for the currency difference, i.e. if its value dropped or increased compared to gold and silver during transactions in the market; does the creditor or debtor bear the difference... There are different views for this issue, and the preponderant view for me is that the repayment of the debt should be with the same currency and the same amount, which has been proved in the liabilities in order to avoid usury (Riba) when taking increased amount. This is as long as the currency is in circulation and is officially recognized by the body that issued it.
And if the creditor wants to save his money from decrease, then let him lend it in gold or a strong currency that retains its value...
And we ask Allah to honor this Ummah with the establishment of the Khilafah Rashidah, so the currency will be in gold and silver, carrying its value within itself. So that the financial life stabilizes and people enjoy in their lives and secure their money, and Allah Almighty is Powerful and Exalted in Might.
Your brother,
Ata Bin Khalil Abu Al-Rashtah
5th Jumada I 1436 AH
24/02/2015 CE
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