Insolvency


The Islamic law of Insolvency is that the creditors can take possession of everything of the debtor except his person, which is free from being molested or sent to prison. There is no civil prison in Islam for a debtor, as by imprisonment the loan cannot be realized owing to the insolvent’s possessing no property of any kind. If a man sells a thing to a man on credit, and the purchaser becomes insolvent, the buyer can take hold of the exact property sold to him, if it was not consumed before-hand. If, however, no identical property is found, it will not be lawful for a creditor to take possession of his entire property to the exclusion of others.

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