Chapter on Bankruptcy and Legal Interdiction
Introduction
Bankruptcy (taflīs) is derived from fals, the least valuable coin, representing the most meager form of money and the lowest grade of currency. Al-Miṣbāḥ states: “A person aflasa when he ends up with only small, debased coins after having possessed silver; he is then a muflis, plural mafālīs.” In essence, it denotes a transition from financial ease to hardship.
In juristic terminology it refers to one whose liabilities are greater than his assets.
Legal interdiction (ḥajr), linguistically, means prevention and restriction. Intellect is called ḥajr because it restrains its possessor from disgraceful acts, as in the Almighty’s words: “Is there an oath in that for one possessed of reason?” (Q 89:5).
In the Sharʿī sense it is the prevention of a person from disposing of his property.
There are two categories of ḥajr:
- Interdiction for the benefit of someone other than the interdicted party, such as placing a bankrupt person under interdiction for the sake of the creditors; restricting a sick person with respect to anything bequeathed beyond one-third of his estate; or interdicting a purchaser of a share in jointly owned property once the pre-emption right has been claimed, and similar cases.
The textual basis for this type of interdiction is the hadith recorded by al-Bukhārī (2402) and Muslim (1559) in which the Prophet ﷺ said: “Whoever finds his property with a man who has gone bankrupt has a stronger claim to it than anyone else.” This is the view of the majority of Muslim scholars.
Al-Isṭakhrī said: “If a judge were to rule contrary to this, his judgment would be annulled.”