Surah Al-Baqara (2) — Ayah 280

(Ayah 280){وَ اِنْ كَانَ ذُوْ عُسْرَةٍ …:} In the time of ignorance, in case of non-payment of a loan, compound interest would be added to the principal amount, due to which a small sum would become a mountain and its repayment would become impossible. The same situation exists today. In contrast, Allah has commanded that if someone is in difficulty, (let alone interest) give him respite until ease, and if you forgive the loan altogether, that is even better. There is great virtue mentioned in the hadiths regarding this. It is narrated from Buraidah (may Allah be pleased with him) that he heard the Messenger of Allah (peace and blessings be upon him) say: "Whoever gives respite to a person in difficulty, he will receive the reward of charity equal to that loan for every day." Then I also heard you say: "Whoever gives respite to a person in difficulty, he will receive the reward of charity double the amount of that loan for every day." I said: "O Messenger of Allah! I heard you say that whoever gives respite to a person in difficulty, he will receive the reward of charity equal to that loan for every day, and then I also heard you say that whoever gives respite to a person in difficulty, he will receive the reward of charity double the amount of that loan for every day?" He (peace and blessings be upon him) said: "Until the due date of repayment, he will receive the reward of charity equal to the loan, and if he gives respite after the due date arrives, he will receive the reward of charity double the amount of the loan." [مسند أحمد : 360/5، ح : ۲۳۱۱۰۔ الصحیحۃ : ۸۶ ]
And the Messenger of Allah (peace and blessings be upon him) said: "Whoever gives respite to his debtor or forgives the loan, Allah will grant him His shade (on the Day of Resurrection)." [مسلم، الزہد، باب حدیث جابر الطویل … : ۳۰۰۶، عن عبادۃ بن الصامت رضی اللہ عنہ ]

280. 1. In the era of ignorance, in case of non-payment of debt, compound interest would keep increasing the principal amount, turning a small sum into a mountain, making its repayment impossible. In contrast, Allah has commanded that if someone is in difficulty (let alone taking interest, even in taking back the principal amount), grant him respite until ease, and if you forgo the debt entirely, that is even better. In hadith, great virtue has been mentioned for this. How great is the difference between these two systems: one is based entirely on oppression, hard-heartedness, and selfishness, and the other is based on compassion, cooperation, and supporting one another. If Muslims themselves do not adopt this blessed and merciful divine system, what fault is it of Islam and what blame can be placed on Allah? If only Muslims could understand the importance and benefit of their religion and establish their system of life upon it.

280. And if the debtor is in hardship, then grant him time until ease. But if you remit it as charity, it is better for you [400], if only you knew.

[400] The virtue in granting respite to a debtor or forgiving him is made clear by the following hadiths:
(1) Hazrat Abu Qatadah ؓ narrates: "Whoever wishes that Allah saves him from the hardships of the Day of Resurrection, he should grant respite to the one in difficulty or forgive him." [مسلم: كتاب المساقاة و المزارعة، باب فضل انظار المعسر]
(2)
The Virtue of Granting Respite in Debt:

The Prophet ﷺ said: "If a person is owed a debt and the debtor delays payment, then for every day (of delay), the creditor receives the reward of charity." [احمد بحواله، مشكوٰة۔ كتاب البيوع۔ باب الافلاس والا نظار، فصل ثالث]
(3) The Prophet ﷺ said: "Whoever grants respite to a person in difficulty or forgives him, Allah will grant him a place under His shade on the Day of Resurrection." (Excerpt from a lengthy hadith) [مسلم۔ كتاب الزهد۔ باب حديث جابر و قصة ابي بسير] And if the debtor is in difficulty and there are many creditors, the Islamic court is authorized to have the creditor or creditors grant respite or forgive a portion of the debt. (This situation is called bankruptcy in our context, and in Arabic, iflas and taflis.) Thus, Hazrat Abu Sa'id ؓ says that in the time of the Prophet ﷺ, a man suffered a loss in the sale and purchase of fruit and his debt increased greatly. The Prophet ﷺ said to the people: "Give him charity." The people gave charity, but still the amount was not enough to pay off the debts. The Prophet ﷺ said to the creditors: "Take whatever (proportion of the debt) you receive, and that is all you are entitled to." [مسلم۔ كتاب المساقاة و المزارعة۔ باب وضع الجوائع] Abdullah bin Ka'b ؓ says that (my father) Ka'b bin Malik demanded his debt from Abdullah bin Abi Hadrad in the Prophet's Mosque. Both began to shout. The Prophet ﷺ was in his chamber. When he heard their voices, he lifted the curtain of his chamber and came out, and called Ka'b ؓ. Ka'b ؓ said: "Present, O Messenger of Allah!" The Prophet ﷺ gestured and said: "Forgive half the debt." Ka'b ؓ said: "O Messenger of Allah! I have forgiven it." Then the Prophet ﷺ said to Abu Hadrad ؓ: "Get up and pay the debt." [بخاري۔ كتاب الحضومات۔ باب كلام الحضوم بعضهم فى بعض۔ نيز كتاب الصلٰوة، باب التقاضي و الملازمة فى المسجد] However, if a creditor finds his own item (for which the debtor has not yet paid) in the possession of the debtor, it will belong to him. [بخاري۔ كتاب فى الاستقراض۔ باب من وجد ماله عند مفلس نيز مسلم۔ كتاب المساقاة و المزارعة، باب من ادرك ماله۔۔۔] In the case of bankruptcy, the Islamic court can seize the debtor's property. Thus, Ka'b bin Malik ؓ narrates from his father that the Messenger of Allah ﷺ prevented Mu'adh ؓ from disposing of his wealth, and that wealth was sold to pay off his debt. [رواه دارقطني و صححه الحاكم و اخرجه، ابو داؤد مرسلاً]

However, the following items will be exempted from seizure:
(1) The bankrupt person's residence, (2) clothing for him and his family, (3) if he is a trader, his trade equipment, and if he is a laborer, his tools of work, (4) food and drink for him and his family, and household utensils, etc. [فقه السنة، ج 3 ص 408]