Question
Our trading company was insolvent and liquidated. After all the assets were disposed of and the creditors paid, there remains a substantial amount of unpaid debts. According to the law, we are absolved from the debt. What is the Shariah's law in this regard?
Answer
According to the Shariah, a company has no validity although it is a legal entity in terms of kuffaar law. One is never absolved of debt. The outstanding debt has to be compulsorily paid. If not paid, the creditors will claim on the Day of Qiyaamah. Pay the debt in small amounts which are affordable. Even if it takes years to settle the debt, do not overlook this incumbent right to the creditors.
- Source
- themajlis.co.za
- Published in
- The Majlis Vol 23 No 08
- PDF page
- 2
Appears under Questions and Answers (approximate).