A Closer Look to the 7 Rules of Debt Collection Per Sharia Laws in UAE

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When it comes to debt collection, there are a few rules that you should be aware of. If you’re in debt and you don’t repay what you owe, there are consequences.

The Qur’ān and the Sunna not only provide guidance for worshiping and living as a Muslim, but also for conducting business. Even so, there is no universal agreement on what constitutes an Islamic finance system. Entrepreneurs are left wondering about the financial regulations related to bankruptcy in Islamic law. To understand better, it is necessary to look into classical Islamic views on finances and bankruptcy.

Islamic finance differs from conventional financing in four key ways: the disallowance of interest (Riba), speculation (Maysir), forbidden actions (Haram), and the need for banks to give back to the community (Zakat).[2] This model is based on a partnership between the investor and entrepreneur—the rabb-el-maal (financier) and mudarib (entrepreneur)—where profits and losses are divided according to a predetermined ratio.[3] For example, if an investor funds an entrepreneurial venture, they receive part of any profits; if it doesn’t succeed, then both parties will accept their portion of the loss.

In this article, we’ll take a closer look at the 7 most important rules of debt collecting in accordance with Sharia law. Keep in mind that these rules may vary from country to country, so it’s important to speak with an expert in order to get accurate information for your specific situation.

 But overall, these are the main principles that you need to keep in mind when it comes to debt collection and the Sharia laws of Islam.

 Definition of Debt Collection in Sharia Laws

Debt Collection in Sharia Law is defined as the act of recovering a debt that is owed. This can be done through a number of methods, but it must be done in a way that is fair to all parties involved.

Good Dealings of Debt Collection

When it comes to debt collection, ascertaining the provisions of Sharia Law is important. The law is clear on the matter of good dealings between the creditor and debtor. The creditor must be patient and lenient with the debtor and should never transgress limits or harass the latter. In order for a debtor to repay a debt, it is essential that the creditor allows for some breathing space and does not rush him into payment.

Prohibitions for Collecting Debts

Now that we know some of the basic dos and don’ts of debt collection in the UAE, it’s important to understand the prohibitions that collectors must adhere to.

Under Sharia law, there are several things that are prohibited in the process of debt collection. This includes but is not limited to:

– Harassment or coercion of the debtor

– Threats of violence or legal action against the debtor

– Taking away the debtor’s property or possessions

– Seizing or freezing the debtor’s bank account

What Debt Collection Means to Muslims in UAE

As Muslims in UAE, debt collection is seen as something more serious than just the debtor having to repay a debt. It is necessary to abide by the rules of Sharia law in order to ensure that debt collection is done in accordance with proper Islamic principles.

First and foremost, it is essential to always give the debtor a chance to repay their debt. This should be done with respect and consideration, and at no time should the debtor be forced or coerced into repayment. Secondly, when negotiating a payment plan or settlement agreement, it should be done without taking advantage of the borrower’s vulnerability; payment plans should be reasonable and tailored to meet the needs of both parties.

Thirdly, Muslims in UAE must always remember that interest-based loans are not allowed under Sharia law. All debts must be incurred through mutually beneficial exchanges that adhere to strict principles and values. Fourthly, collecting debts from those who are financially unable to pay must also be avoided; if someone is in financial hardship, then it is the responsibility of their friends and family members to help them out with repayment instead of enforcing legal action against them.

The Qur’ān stresses the absolute importance of debt repayment. Verse 5:1 states, “O you who have believed, fulfill [all] contracts.” Hadith also highlight the great importance of paying what one owes – for instance, in an oft-cited narration from Abu Hurayra, the Prophet ordered his companions to give a creditor a better camel than what he was owed due to his rude demands. It’s clear that failing to pay debt will not be forgiven after death. Thus, it seems that countries which influence their laws with Islamic values would have strict rules concerning debt and payment.

Additionally, the Qur’ān advises creditors to be patient with debtors who are having difficulty paying or have defaulted on their debts. It states that if someone is in hardship, then postponement should be granted until a time of ease. The hadith also cites a man who forgave those who owed him or allowed them time to repay and still went on to enter heaven; this further shows how highly tolerant repayment is valued in Islam and serves as the foundation for lending laws.

Best Practices in Debt Collection Per Sharia Laws

It’s important to practice the best methods when it comes to debt collection, in order to adhere to the regulations set by the Sharia Laws of Islam. To do this, you should always be aware of your rights as a creditor and debtor, be clear about debt agreements and have proper documentation for every transaction you make.

There are also certain practices that should be avoided when following Sharia rules during debt collection. These include such actions as taking or giving bribes, working with a collection agency that has access to personal data, or using any form of physical or sexual harassment. If any of these practices are used against either party in the debt collection process, they can be subject to serious consequences.

Furthermore, it is also extremely important to follow ethical standards when negotiating settlements with a debtor in order to ensure not only that justice is served but that all parties involved are treated fairly and respectfully regardless of their religious beliefs or financial situation.

Negotiations With the Debtor as Per Islamic Principles

It is important that all negotiations with the debtor should be conducted in accordance with Islamic principles, including ethical conduct and respect for the debtors. This would include conducting negotiations in a respectful manner, allowing sufficient time to review the information presented and for payment arrangements to be made if possible. It is also important to provide sufficient time for mediation or arbitration as per Islamic law.

Both parties of the negotiation should be held to their agreements and failure to abide by their agreements should not be condoned or tolerated. All contracts made should be legally enforceable in accordance with Sharia laws and codes of practice, which are predominantly based on the Quran and Sunnah. The dealings between creditors and debtors must always remain amicable, discreet, and respectful so that the relationship may remain cordial even after any disputes have been settled.


So, in conclusion, these are seven debt collection rules under Sharia law in UAE. If you are an individual or company in debt, it is best to be aware of these rules and try to adhere to them as best as possible to ensure a smooth, lawful debt collection process.

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