Dear Respected Mufti, Assalamu’alaikum wa rahmatullaahi wa barakaatuhu, Six years ago, when I first became Muslim, I took out a credit card and maxed out the limit of $1000 within that year. I was a poor college student, working to pay tuition and cost of living, and was unable to pay the debt and it went into collections. I now know the punishment for dealing in interest and have not taken loans, and I’ve repented to Allah (swt) for the past. I’m married now and my husband and I are constantly struggling. Alhamdulillah, we are trying to clear any debt from the past and slowly we are doing it. But I need to know if the amount that I am required to pay back to the lender is the principal of $1000 that I used up, or the principal plus the interest and other charges that have accrued, as they are claiming I now owe them $1700. Also, if we are unable to pay this credit card within the next year, the debt will be taken off of my credit report and the bank will file something stating that they took a permanent loss–I’m not exactly sure what the terms are. But if we aren’t able to pay them this year, then if/when insha’Allah we are able to come up with the money, do we give it to charity since the case will be non-existant with this bank, if that happens to be the case as I understand it?? Thank you and jazakum’Allahu khairun for your work
In principle, you are required to repay only the principle amount of $1000
You stated that you and your husband are undergoing financial constraints,
therefore, you advise you request relief from the bank. If that is not
possible, you should endeavour to honour the debt. If you were sincerely
unable to do that, and the bank declares that as a loss, then you will be
excused.
and Allah Ta’ala Knows Best
Mufti Ebrahim Desai