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Creditor willing to settle

Fatwaa ID: 2069

Assalamu Alaikum,

If a creditor is willing to settle an amount that I owe to a lower balance, in Islamic perspective would it be OK to pay that lower amount and settle the debt? Or should I be sinful if I don’t pay the full amount that was borrowed originally?

Please advise.

JazakAllah Khair

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

If a creditor voluntarily pardons a loan from his debtor who is in financial constraints, either partially or fully, then that is permissible. That is an act of kindness for which he will be greatly rewarded. The debtor will not be sinful for paying the settled amount only.

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

07/15/1445 AH – 01/27/2024 CE | 794

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


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