Debt repayment

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salamu alaykum wa-rahmatullahi wa-barakatuh.

Sister in Islam,

May Allah reward you and your siblings for your concern to discharge your father's obligation. Settling the debt of a deceased parent is among the greatest acts of kindness a child can do for him, and its benefit reaches him in his grave.

Regarding your first question, a debt does not lapse with the death of the borrower or the lender, nor with the passage of time. It is owed from the borrower's estate before the estate is distributed to his heirs. If your father's estate has already been distributed, the heirs are responsible for the debt to the extent of what each received from the estate. If the estate was insufficient or nothing was left, no heir is legally obliged to pay from his own wealth, but paying voluntarily on your father's behalf is valid, is rewarded, and discharges him.

Regarding your second and third questions, a debt in currency is repaid in the same number of units that were lent. This is the ruling of the Hanafi school and it holds even where the currency has lost most of its value, because any increase over the amount lent that is owed as part of the debt is interest, whatever the reason given for it. Accordingly, the entitlement of the lender's heirs is G$6,000 and no more. They may not demand a higher figure on account of inflation, and the heirs on both sides may not agree to treat a higher figure as the amount of the debt, because an increase that is agreed and made binding, whether at the time of the loan or afterwards, is an increase on a loan and is not permissible. What is permitted is different in kind. Once the debt is being settled, the debtor's side may, of its own accord and without any prior understanding or condition, pay more than the amount owed as a gift and as a charity on behalf of your father, and the lender's heirs may accept it. The difference between the two is that in the first the extra is owed and can be claimed, and in the second it is owed by no one, is claimed by no one, and is given freely at the moment of settlement. We advise you to take the second path, because the purchasing power of what your grandfather lent was far greater than what G$6,000 represents today, and a token repayment would discharge the debt in law but not in generosity.

Regarding the fourth question, the debt is owed to the heirs of the lender as they stood at his death. Note that since the lender was your father's father in law, his heirs include your own mother, and if she has passed away, her share of the debt has passed to her heirs, which includes you. Identify the heirs of your grandfather, and each one's share of the debt goes to him, or to his heirs if he has died. Whatever belongs to those who cannot be located after a genuine effort should be given in charity on their behalf, with the understanding that if any of them later appears and claims it, you will pay him.

Regarding the fifth question, the amount that must be paid is G$6,000, divided among the lender's heirs according to their shares. Beyond that, decide among yourselves, without any negotiation with the lender's heirs and without any commitment to them, what additional amount you wish to give as a gift on your father's behalf. A reasonable guide for your own decision is what G$6,000 was worth in 1960 in terms of a stable measure such as gold or the American dollar, but you are not bound to that figure or to any figure, and whatever you give freely, within your means, discharges the debt with the pleasure of Allah and reaches your father as a reward.

Allah knows best

Mufti Mirza-Zain Baig