Tuesday, May 21, 2024
No menu items!

Credit card debt query

Fatwaa ID: 1280

Question:
I used my credit card and unfortunately was unable to repay. Now iv incurred interest n legal fees etc..i now hav the money to repay it. But my debt has been sold by the bank to a debt collector who in turn sold it to another.

  1. If the creditor has disposed of this debt by selling to the third party

1.1 was this sale valid?

1.2 am I now bound to pay this party?

If yes to the above then:

  1. Can I negotiate with this third party to lower the debt considering they purchased it for probably 10 to 20% the value of the original debt.

If the answer to question one is NO then:

I have approached the bank and they say the debt is no longer with them and it is not possible for me to pay them.

The reason y I am asking is because legally(south african law), the debt has prescribed so I don’t have to pay it. That being said, I acknowledge that islamically I am required to pay it off, hence my attempt to settle it. The reason for my question is follows.

  1. The debt collector that the bank sold the debt to refuses to send me a statement showing how they arrived at the figure owing.
  2. I have searched for similar cases online and have found a website that says we should never pay these people, because they never consider the debt written off. The will continue to send you demands for payment even after u have settled it, and continue to add bogus charges to the original debt.

https://mbdvictim.wordpress.com

This is the link to the website regarding the tricks of the debt collectors. (This is the same debt collector that has contacted me)

If I cannot get a settlement letter from the bank or from the 3rd party, what do I do?

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

May Allaah Ta’aala make it easy for you. We take note of the details of your query.

1.1. A creditor may sell or transfer a debt to someone else. This must be done at par value for it to be permissible. If it is done for a lower or greater price, then that will be an interest bearing transaction and thus impermissible. Notwithstanding this, the transfer will be valid and it will not affect the debtor.

1.2. You are obligated to pay off your debt to the new creditor. You are only obligated to pay the debt amount, not any interest or impermissible fee charged.

  1. You may negotiate with the third party to lower the debt. You may even try to get it waived. You are in your right to demand statements and papers. You may take as long as necessary.

We advise you to apply your due diligence and seek advice from appropriate financial advisors. Do not get yourself into any legal issues. At the same time, protect yourself and your wealth and do not get scammed.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York
https://askthemufti.us/

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين

__________________
Disclaimer

Darul Iftaa New York answers questions on issues pertaining to Shari’ah. These questions and answers are placed for public view on askthemufti.us for educational purposes. The rulings given here are based on the questions posed and should be read in conjunction with the questions. Many answers are unique to a particular scenario and cannot be taken as a basis to establish a ruling in another situation. 

Darul Iftaa New York bears no responsibility with regard to its answers being used out of their intended contexts, nor with regard to any loss or damage that may be caused by acting on its answers or not doing so.

References and links to other websites should not be taken as an endorsement of all contents of those websites. 

Answers may not be used as evidence in any court of law without prior written consent of Darul Iftaa New York.