Foundations of Forgiveness in Islamic Bankruptcy Law: Sources, Methodology, Diversity

31 Pages Posted: 12 Aug 2011

Date Written: August 11, 2011


This article provides a detailed examination of the structure, sources, and ultimate content of the Islamic law of distressed debt. With specific illustrations from the Qur'an, sunna, and fiqh (Islamic jurisprudence), it orients non-specialists on the path to understanding where Islamic law comes from, how it is structured, and what its most salient provisions say about the proper treatment of insolvent debtors. Tracing the various divisions within Islam on the proper identification of shari'a, this article reveals a rich tapestry of contrasting views among and within the shi'a and sunni doctrinal schools of thought. Both the original sources and the secondary juristic analyses of these sources struggle with a delicate balance between forcing debtors to pay their debts while enjoining creditors to be patient and forgiving with respect to distressed debtors. It is hoped that this detailed and sensitive discussion will enhance the increasingly frequent insolvency law reform conversations between Westerners and those in Muslim nations by encouraging the former to respectfully engage with classical Islamic sources and methods, as opposed to advancing arguments based merely on Western views of economic expediency, efficiency, and experience.

Keywords: insolvency, bankruptcy, ijtihad, madhhab, Hanafi, Maliki, Shafi'i, Hanbali, zakat, sulh, debtors prison

Suggested Citation

Kilborn, Jason J., Foundations of Forgiveness in Islamic Bankruptcy Law: Sources, Methodology, Diversity (August 11, 2011). Available at SSRN: or

Jason J. Kilborn (Contact Author)

UIC John Marshall Law School ( email )

University of Illinois at Chicago
300 S. State St.
Chicago, IL 60604
United States


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