Business liquidating but still has debts

Almighty Allah Ta'ala states in the Noble Qur'aan 'Oh you who believe, Do%0D%0Anot eat your wealth among yourselves unjustly, except that it be a%0D%0Atransaction with mutual happiness.' (Sura Nisaa Aayat 29). %0D%0A%0D%0AThe prohibition %0D%0Aof unjustly eating the wealth of others includes dishonouring a debt. Allah%0D%0ATa'ala and Rasulullah (Sallallaahu Alayhi Wasallam) have announced serious%0D%0Awarnings and punishments for dishonouring debts. Consider the following%0D%0Aquotations.%0D%0A%0D%0A* And whosoever does that (unjustly eats the wealth of others), We will soon%0D%0Aburn him in the fire (Ibid).%0D%0A%0D%0A* Hadhrat Abdullah Ibn Umar (RA) narrates that Rasulullah (Sallallaahu%0D%0AAlayhi Wasallam) said every sin of a Shaheed (martyr) is forgiven but debts.%0D%0A(Mishkaat Pg. 252, Me'raaj).%0D%0A%0D%0A* Hadhrat Abu Hurairah (RA) narrates that Rasulullah (Sallallaahu Alayhi%0D%0AWasallam) said, 'The soul of a believer will be suspended (from entering%0D%0AJannah) due to his debt until paid.' (Ibid).%0D%0A%0D%0A* Hadhrat Abu Hurairah (RA) narrates that when the janaza of a deceased who%0D%0Awas in debts used to be brought to Rasulullah (Sallallaahu Alayhi Wasallam),%0D%0Ahe used to enquire whether the deceased had left moneys in his estate or%0D%0Anot; if there were moneys (to honour the debts) then only would he perform%0D%0Athe janaaza (Ibid).%0D%0A%0D%0A* Hazrat Abu Hurairah (RA) narrates that Rasulullah (Sallallaahu Alayhi%0D%0AWasallam) said, the (undue) delay of a wealthy person in paying his debts is%0D%0Aoppression (Mishkaat Pg. 251, Me'raaj).%0D%0A%0D%0AIn an Islamic State it is the responsibility of the ruler to secure payments%0D%0Aof debts. If a debtor has some wealth, the ruler will imprison him until he%0D%0Asells his belongings - in order to honour his debts. (Raddul Mukhtar vol. 6%0D%0Apg. 150 HM Saeed). If he refuses to sell his belongings, the ruler will then%0D%0Ahimself sell all his belongings and distribute it to the creditors pro-rata%0D%0Atheir debts. The ruler may leave only one set of clothing for the debtor to%0D%0Acover his body (Hidaya vol. 3 - chapter of Hajr). The ruler even has the%0D%0Aright to take all his (debtor's) cash and pay the creditors without the%0D%0Aconsent of the debtor.(Ibid) According to Imaam Abu Hanifa, after the%0D%0Alitigation process of any possible recovery of debts, and the debtor being%0D%0Adeclared insolvent by the ruler, then too the debtor is not absolved from%0D%0Ahis debts. Rasulullah (Sallallaahu Alayhi Wasallam) said that the person%0D%0Awith the right (creditor) has a hand and tongue. (Nasbur - Raayah Zailaee%0D%0Avol. 4 pg. 166 - Majlis - Ilmi). The hand and the tongue in the above hadith%0D%0Arefers to the constant demand of the creditor for the payment of the debt.%0D%0AThe creditors have the right to take the earnings of the insolvent debtor%0D%0Aand divide it among all creditors. (Hidaya Ibid)%0D%0A%0D%0AFrom the aforegoing, it is clear that the rules and principles of insolvency%0D%0Ain the secular system does not corroborate with the laws and principles of%0D%0Ainsolvency in Shariah. It is not permissible to search and create a loophole%0D%0Ain the legal system and declare oneself insolvent in order to avoid payments%0D%0Ato one's creditors. That will be regarded as oppression and a major sin. If%0D%0Athe debtor still owns a house, cars, etc., according to Shariah he is not an%0D%0Ainsolvent person. He should sell his belongings, car, house etc., and honour%0D%0Ahis debts. However, if a person is honestly insolvent, he should seek the%0D%0Aforgiveness of his creditor and make every attempt to pay the debt. He%0D%0Ashould also record the debt in his will. Rasulullah (Sallallaahu Alayhi%0D%0AWasallam) also advised the creditor to be lenient to his debtors. If%0D%0Apossible he should grant respite for late payments or remit the entire or%0D%0Apart of his debt. Rasulullah (Sallallaahu Alayhi Wasallam) informed us of a%0D%0Acreditor being forgiven by Allah Ta'ala for his sins due to his leniency to%0D%0Ahis debtors.%0D%0A%0D%0AAs Muslims we should be conscious of our accountability in the court of%0D%0AAllah Ta'ala and be truthful in all our dealings.%0D%0A%0D%0Aand Allah Ta'ala Knows Best%0D%0A%0D%0AMufti Ebrahim Desai%0D%0A%0D%0A