The Claim of Bankruptcy and Its Jurisprudential Effects: A Comparative Study of Islamic Denominations

Document Type : Original Article

Authors

1 Professor, Department of Jurisprudence and Fundamentals of Islamic Law, Faculty of Theology, University of Tehran, Tehran, Iran

2 PhD Student, Department of Jurisprudence and Fundamentals of Islamic Law, Faculty of Theology, University of Tehran, Tehran, Iran

10.22034/mfu.2025.142376.1512

Abstract

Upon acceptance of a bankruptcy claim (iflᾱs), the bankrupt individual (muflis) becomes subject to financial and non-financial rights and obligations, some of which are restrictive while others are advantageous. Moreover, the interdiction (hajr) of the debtor minimizes the potential infringement of creditors' (ghurmᾱ') financial rights and provides an opportunity for partial repayment of their claims from the debtor's remaining assets. The jurisprudential and legal status of bankruptcy necessitates a thorough understanding of who can claim bankruptcy and under what conditions such claims are accepted. This research, conducted through a descriptive-analytical method based on library sources, aims to address the question of who is authorized to claim a debtor's bankruptcy and what are the effects of such a claim. According to the findings, Muslim jurists have proposed three possibilities for claiming bankruptcy: by creditors, the debtor, or the ruler (hᾱkim). Disregarding the Hanafi view on the non-interdiction of the bankrupt, the majority of jurists from other schools accept the preemptive action of creditors in claiming the debtor's bankruptcy, citing their rights, knowledge of the debtor's situation, and the interest in preserving existing assets. While Hanafi, Hanbali, and Maliki schools have not addressed the issue of bankruptcy claims by the debtor, Imᾱmī and Shafi'i jurists argue that the debtor can claim their own bankruptcy and consequent interdiction. This is because the debtor is most aware of their financial situation, and such a claim is considered a self-admission. Some narrations also suggest that creditors' demands are not a prerequisite for declaring bankruptcy. Jurisprudential sources ascribe two roles to the ruler: governance and guardianship (wilᾱyah). According to the prevalent opinion among Imᾱmī jurists, the ruler in the capacity of a judge cannot claim a debtor's bankruptcy as they do not possess rights in this position. However, according to Imᾱmī and Shafi'i jurists, the ruler in the capacity of guardian can claim the debtor's bankruptcy on behalf of the creditors or the debtor, in cases where guardianship is needed and there is no specific guardian available. This is because the ruler, acting in the best interests of those under guardianship (mawlᾱ 'alayhim), is obligated to preserve the assets of his ward (mawlᾱ 'alayh). Common effects of bankruptcy include prohibition of asset disposal, creditors' claims attaching to specific assets, the seller's priority right to the sold item, and the sale and distribution of assets. However, there are disagreements regarding the imprisonment of the debtor, prevention and accompaniment measures, and compulsion to work.

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References

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Comparative Studies on the Schools of Jurisprudence and its Principles
Volume 8, Issue 1 - Serial Number 14
Publisher
April 2025
Pages 41-25

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