// bankruptcy
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Author Topic: bankruptcy  (Read 2155 times)
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Anonymous
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« on: Apr 21, 2009 01:56 AM »


Is there anything Islamic anyone can tell me about filing bankruptcy?
I feel the need to file cause of getting sued and people adding interest and attorney fees.
There is no way to pay them as fast as they want to be paid.
Will file the bankruptcy where they get paid, not the one that disolves the debt.
Anonymous
Guest
« Reply #1 on: Apr 21, 2009 10:30 PM »

Asalamualaikum wrt wb,


All praise be to Allah.


I can mention two things that the scholars state:


1.)  It is not permissible to pay interest, Ribaa, it is haram, and you should avoid this as much as possible, and you are not obligated to pay it, rather it is haram for you.


2.)  Lenders should be easy going with the borrowers and grant them respite or forgive their loans if possible.


The Prophet, pbuh, would make the dua:  Oh Allah, I seek refuge in you from being overcome by debts, and overpowered by men.



And Allah knows best.
Anonymous
Guest
« Reply #2 on: Apr 22, 2009 02:53 PM »

Peace be On to you Brother/Sister.

Clearly you are in a situation of debt with interest. So talking about what's haram or not is not the question - but getting out of debt and ultimately removing yourself from the interest situation is the priority.

There are three steps you can take before declaring yourself "bankrupt":

1. CONSOLIDATION LOANS
2. PROPOSALS and
3. NEGOTIATING

The second and third options usually require the assistance of a Trustee in Bankruptcy or a Bankruptcy Lawyer.

Please do not delay these options - ignoring the problem will not make it go away, and will reduce the options available to you.



CONSOLIDATION LOANS


If your credit history will still allow you access to credit, a consolidation loan can help you lower your payments by hopefully getting a lower interest rate than you are currently paying as well as spreading your payments over a longer period of time.


PROPOSALS


A proposal is made through a trustee in bankruptcy and the rules are very simple. You make an offer to your creditors to settle your debts. All interest payments stop. The trustee or lawyer prepares the paperwork and mails your offer to the creditors. The creditors then vote to decide whether they will accept what you are offering. You can offer full payment or less but the closer you are to paying your creditors in full, the more likely the will accept what you offered.


NEGOTIATING


The negotiating can be done by you or by someone on your behalf (eg. a lawyer). This is usually an approach used if you know your money situation will soon improve. For example, if you are receiving unemployment insurance and will be called back to work in 2 months. This method is simply asking the creditors to be patient and to lower or suspend your payments until your income improves. Creditors are often reasonable if you talk to them before you get too far behind in your payments.


BANKRUPTCY

In a Bankruptcy, you are simply saying that you want relief from the debts you owe and in return you will give up your all your assets except basic clothing and furniture.  A bankruptcy will stay on your credit record/file for 7 years.
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