Sale of Debts

In the Name of Allāh,

the Entirely Merciful, the Especially Merciful

Praise is due to Allāh, Lord of the worlds, may the blessings and peace be upon our master Muḥammad, the last of prophets, on his family, and all his companions.

Resolution No. 158 (7/17) Sale of Debts

The Council of the International Islamic Fiqh Academy of the Organization of the Islamic Conference, holding its 17th session in Amman, Hashemite Kingdom of Jordan, on 28 Jumādā al-Ūlā – 2 Jumādā al-Ākhirah 1427h (24–28 June 2006), Having examined the research papers submitted to the Academy concern-

ing the Sale of Debts,

Having listened to the discussions on the subject,

Having recalled the Academy resolution no. 101 (4/11) concerning the Sale of Debts and Muqāradah Bonds, which stipulates that “It is not permissible to sell, to a third party, any immature debt for an early-paid amount of money, whether in the same currency of the debt or any other currency, etc,”

Having also recalled the Academy resolution no. 139 (5/15) concerning Credit Cards, which stipulates that “Islamic financial institutions should avoid any suspicion of interest or an excuse that may lead to it, such as Debt-for- Debt Swaps,”


First: Debt-for-Debt Swap, which Shariah prohibits, includes any arrange- ment involving or indirectly leading to “increasing the amount of debt against extending the maturity.” One form of such arrangement is a debt swap, in which the original debt is paid, partially or entirely, through a new transaction between the two parties that creates a new(larger) debt regardless of whether the debtor is solvent or not. For example, the debtor purchases a commodity from his creditor for a deferred price and sells it for an instant price used to settle the original debt or part of it.

Second: Shariah-acceptable Forms for the Sale of Debts:

  1. Selling the debt by the debtor to a third party in one of the following forms:

    1. Selling the debt (at face value) for an amount in a different currency valued at the current market rate on the day of the transaction.
  1. Selling the debt for a specific
  2. Selling the debt for a usufruct of a specific asset.
  1. Selling debts as part of a mix in which physical goods/assets and usufructs is a majority and constitute the main object of the sale transaction.


Preparation of rigorous studies to finalize the remaining issues on this subject and its contemporary applications.

Indeed, Allāh is All-Knowing.

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