Monday, May 27, 2024
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Bankruptcy and inheritance

Fatwaa ID: 1409

Assalamualaikum mufti Saab. I was asked a question about bankruptcy. So the father filed bankruptcy in Pakistan which was approved by the court. Now the person has passed and his children are asking if they were liable to find those they owed? It was during war time and they were owed more than what they owed to others from individuals to companies.

In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

In principle, filing bankruptcy does not automatically absolve one of the debts. The debts remain outstanding until paid, settled or waived. In the enquired situation, the heirs are not responsible to search for creditors. However, if they are aware of creditors, especially individuals or private entities, then they will have to reach out to them and resolve the case. Likewise, if a creditor makes a claim and substantiates it, then the estate will have to pay him first.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


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