Islam takes the matter of debt very seriously, warns against it and urges the Muslim to avoid it as much as possible. Prophet Muhammad used to seek refuge with Allah from sin and debt. He refrained from offering the funeral prayer for one who had died owing two Dinars. In Islam, debt has personal and societal negative consequences, so those in debt should strive hard to pay off the debt. They should put their trust in Allah, and pray that He makes it easy for them to pay it off.

The correct way of lending money in Islam is: 1- To specify the period of the loan. 2- Writing down the loan. 3- If the one who writes down the loan is a person other than the debtor, then the debtor is the one who should dictate to him the details of the loan. 4- If the debtor is unable to dictate because of sickness or some other reason, then the one who should dictate on his behalf is his guardian. 5- The loan should be witnessed, and the witnesses should be two men, or one man and two women. 6- The lender has the right to ask the borrower to guarantee the loan with a pledge which the lender will keep.

It is permissible for the workplace to deduct something from the employee’s salary to pay off a debt that he owes to them, provided that that is done with the consent of both parties and provided that it will not add up to more than what is owed.

Loans should be repaid in the same currency as they were taken by the borrower unless the two parties agree at the time of repayment to repay it in a different currency. There is nothing wrong with that so long as that is done at the rate of exchange on the day of repayment not the rate of exchange that existed on the day when the loan was given.

In Islam, a son is not automatically responsible for his father’s debts. The debt should be paid from the deceased’s estate before any inheritance is distributed among the heirs. If the father left no estate or assets, the son is not obligated to pay off the debt. However, it is considered an act of kindness to pay the debt voluntarily, especially if the son is capable.