A Primer on Islamic Law of Insolvency .
Islamic law is a complete code of life for the believers. It enjoys the features of
flexibility and rigidity. Although these features may seem to be contradictory,
they are balanced by Islamic law harmoniously. Thus, we see that the general
principles in Islamic law are fixed and are not subject to change. However, the
minor details and practical application may change with the passage of time.
Due to its flexibility, this law is capable of adapting itself according to the
changes of society. A unique aspect of Islamic law is insolvency and/or
bankruptcy. Although this notion is not widely discussed these days, the books
of fiqh are rich with a code of insolvency for individual debtors. There is a
complete theory underlying this code which balances the rights of debtors and
creditors. Thus, Islamic insolvency does not violate the right of debtor or
creditors. Both are given their due rights without any comprise on the rights of
other party. In this article, we introduce the Islamic law of insolvency briefly.
The purpose is to add to the academic debate on insolvency today.
Particularly, this chapter of fiqh is important due to the wide spread growth of
Islamic finance whereby instances of insolvency are observed frequently. He
paper is a theoretical attempt to highlight the general theory of Islamic