Islamic Debt Help
Debt is an increasingly worrying problem. As more of us fall into the trap of buying things we cannot afford it is more common to seek help. There are many solutions available for the many of us experiencing financial difficulty, but for some there is an added complication.
Debt and Islam
In the religion of Islam, debt is considered a serious issue that should be avoided as much as possible. It is understandable that in this modern world and time of global financial crisis, debts cannot be entirely avoided. Even acquiring assets such as a property or a car will result in you dealing in borrowing and owing money. Some borrowing is necessary, and that’s why the Islamic financial products are becoming more readily available. Islamic debt solutions are a natural progression and could be the answer if you are also dealing with the debt burden.
What debt solutions are out there?
There are a number of debt solutions readily available and most comply with the Islamic principles of banking and are designed to drop debt. Some of the debt solutions available include:
Debt Management Plans – involves making one regular monthly payment towards the debts until they are repaid in full. Interest (Riba) and charges are typically frozen or reduced.
Individual Voluntary Arrangement (Trust Deed for Scotland) – involves making monthly payments for a fixed time frame, typically 5 years. If debts are not repaid by the end of the IVA term then debts are written off.
Bankruptcy – involves seeking a bankruptcy order through the court and declaring yourself insolvent – entirely unable to repay your debts. Debts are cleared but assets – such as your home or care – will be used to towards paying creditors.
Debt Relief Order (DRO) – involves making a payment to obtain the DRO through the court. It lasts for one year and if your debts are not repaid they may be written off.
Consolidation loan – involves taking a loan out which can be used to repay all existing debts and then making on monthly payment to clear the debt over the loan term.
In Islam, making money from money is forbidden and should only be made through legitimate business, trade or investments. Riba refers to interest and is considered a serious sin, forbidden by Allah. Riba describes making a profit from money leant, in which one party invariably pays more than is borrowed and an income is made. Riba is considered a wasteful use of money and is not in following with the teachings of the Quran.
“The riba that is practised to increase some people’s wealth, does not gain anything at God. But if people give to charity, seeking God’s pleasure, these are the ones who receive their reward many fold.” (Quran 30:39)
What Islamic debt solutions are available?
The debt solutions are available to all, there is also availability for Muslims. If you are struggling with financial issues, there is great chance to lessen the debt burden and seek debt advice as soon as possible. Availability of solutions can vary depending on your level of debt, income, assets and affordability. Debt management plans are now one of the most popular choices of debt help, as the arrangements made are informal and it is very straight forward. Islamic Debt Help can be uncomplicated and help you cut your stress and worry.