Question and Answer: Rulings regarding Business of Debt Collector


The following is the description of this business:

For example, A (a person or a company) gave some loans to another person or company, named B. After some time, reasoning that B hasn’t settled his debt as signed in their contract, A recruited a person or a company, named C, to be his debt collector. C worked to collect the debts of B, and he was paid by A according to an agreement between them, whether in a form of percentage of money that he managed to collect from B, or an amount that has been agreed before.

While what happened, mostly, in the real life (an additional explanation from me), is that debt collectors usually recruited by banks or other funding companies since those institutions operate in business of debt and credit. Profession of debt collector (in here C), usually identical to violence, because the professionals used to force, even by terrorizing, the debtor (in here B) to settle his debt. This is because they are paid to collect the loans back. And we already got so many reports about this matter.

Andi S.
Baladewa street, Depok


All praises be to Allah, peace and prayer may always be upon Prophet Muhammad, his family, and his devoted companions. Amin.

As explained in several previous occasions that debt and credit is one type of contract that aimed to offer help or aid to the needs. That is why the first party, serves as the helper, that is usually termed as creditor, is not allowed to gain profits from the aid he gives. Creditor should only seek for rewards and profits from Allah; in the form of merits, blessings in life, and His please.

Furthermore, if your brother, that is the debtor is not capable yet to settle his debt, the creditor, is obliged to postpone the due time until the debtor get chances to fulfill his obligation.

وَإِن كَانَ ذُو عُسْرَةٍ فَنَظِرَةٌ إِلَى مَيْسَرَةٍ

“But if the debtor is in straitened circumstance, let him have respite until the time of ease; and whatever you remit by way of charity is better for you, if only you know.” (Qs. Al Baqarah/The Cow: 280)

Although the debtor is able to settle his debt in time, The shari’a of Islam still open the door of Paradise to the creditors, that is, if he let half or even all of the credit he gave unpaid:

وَأَن تَصَدَّقُواْ خَيْرٌ لَّكُمْ إِن كُنتُمْ تَعْلَمُونَ

“And whatever you remit by way of charity is better for you, if only you know.” (Qs. Al Baqarah/The Cow: 280)

This condition will certainly apply if every creditor take the laws of Allah, and faith in Allah and the Last Day as their guiding lantern in their lives.

مَنْ طَلَبَ حَقّاً فَلْيَطْلُبْهُ فِي عَفَافٍ وَافٍ أَوْ غَيْرَ وَافٍ. رواه الترمذي وابن ماجه وابن حبان والحاكم

“Whoever ask for his right, shall ask it with dignity, whether he’ll manage to get it or not.” (Narrated by Tirmidhi, Ibn Maja, Ibn Hibban, and Al Hakim).

Brother, these indications above show that Islam teach people to practice noble manners. And what do you think about this beautiful and excellent shari’a?

Hence, the creditor will always be a contributed one, whether the debt he lent being settled in time or not, and the debtor as the helped party should appreciate and being grateful for the aids of his brother.

لاَ يَشْكُرُ اللَّهَ مَنْ لاَ يَشْكُرُ النَّاسَ. رواه أبو داود وغيره

“A man who isn’t being grateful for others (who did good to him) doesn’t considered as being grateful to Allah.”

It is deservedly for you to behave kindly to your brother who had helped you and offered you aid. That is why, the Prophet -peace and prayer of Allah be upon him- stated that among the indications that you are a noble-minded and lofty man is that you realize the merits of your brother to you and try to return it to him a better way.

إِنَّ خِيَارَ الناس أَحْسَنُهُمْ قَضَاءً. رواه مسلم

“The best of man is the best one when he settled his debt.” (Narrated by Muslim)

If you couldn’t recompense your brother’s kindness and help with a better one, at least you should pray for goodness for him:

مَنْ صَنَعَ إِلَيْكُمْ مَعْرُوفًا فَكَافِئُوهُ فَإِنْ لَمْ تَجِدُوا مَا تُكَافِئُونَهُ فَادْعُوا لَهُ حَتَّى تَرَوْا أَنَّكُمْ قَدْ كَافَأْتُمُوهُ. رواه أحمد وأبو داود وصححه الألباني

“Whoever has been kind to you, recompense his kindness. And if you don’t have anything to recompense him, pray for goodness for him until you feel that you’ve recompensed him.” (Narrated by Ahmad, Abu Dawud, and classed sahih by Al Albani)

This is the ideal picture of debt and credit according to Islamic shari’a.

However, since Islam is not the religion of the idles and greed, it already close all doors to evil men to bear their evils. As Islam has blocked all doors of usury to be happened, it is also closed all ways for evils of the brazen-faced to be happened.

Thus, Islam condemned (forbid) the actions of delaying in settling debts.

مَطْلُ الْغَنِىِّ ظُلْمٌ وَإِذَا أُتْبِعَ أَحَدُكُمْ عَلَى مَلِىءٍ فَلْيَتْبَعْ. متفق عليه

“Delays of the capable man is a wrongdoing, and if your bill is moved to the have, he shall obey it.” (Muttafaqun ‘alaih)

In another narration, the Prophet -peace and prayer of Allah be upon him- threatened the greedy who do not recompense the kindness of their brothers, in his saying:

مَنْ أَخَذَ أَمْوَالَ النَّاسِ يُرِيدُ أَدَاءَهَا أَدَّى اللَّهُ عَنْهُ ، وَمَنْ أَخَذَ يُرِيدُ إِتْلاَفَهَا أَتْلَفَهُ اللَّهُ. رواه البخاري

“Whoever takes other people wealth intending to return it, Allah will ease his way in returning that wealth, and whoever takes other people wealth intending to spoil it, Allah will certainly destroy him.” (Narrated by Bukhari)

And among the ways of shari’a to block the evil practices of the brazen-faced is by obliging writing, and witnessing in every debt contract, and by legalizing mortgage.

These three things are applied to give safety for the rights-owner, that is the creditors, from the wickedness of the debtor, as well as to give safety for debtors from the greediness of the creditor, as explained in the verses below:

يَا أَيُّهَا الَّذِينَ آمَنُواْ إِذَا تَدَايَنتُم بِدَيْنٍ إِلَى أَجَلٍ مُّسَمًّى فَاكْتُبُوهُ وَلْيَكْتُب بَّيْنَكُمْ كَاتِبٌ بِالْعَدْلِ وَلاَ يَأْبَ كَاتِبٌ أَنْ يَكْتُبَ كَمَا عَلَّمَهُ اللّهُ فَلْيَكْتُبْ وَلْيُمْلِلِ الَّذِي عَلَيْهِ الْحَقُّ وَلْيَتَّقِ اللّهَ رَبَّهُ وَلاَ يَبْخَسْ مِنْهُ شَيْئًا فَإن كَانَ الَّذِي عَلَيْهِ الْحَقُّ سَفِيهًا أَوْ ضَعِيفًا أَوْ لاَ يَسْتَطِيعُ أَن يُمِلَّ هُوَ فَلْيُمْلِلْ وَلِيُّهُ بِالْعَدْلِ وَاسْتَشْهِدُواْ شَهِيدَيْنِ من رِّجَالِكُمْ فَإِن لَّمْ يَكُونَا رَجُلَيْنِ فَرَجُلٌ وَامْرَأَتَانِ مِمَّن تَرْضَوْنَ مِنَ الشُّهَدَاء أَن تَضِلَّ إْحْدَاهُمَا فَتُذَكِّرَ إِحْدَاهُمَا الأُخْرَى وَلاَ يَأْبَ الشُّهَدَاء إِذَا مَا دُعُواْ وَلاَ تَسْأَمُوْاْ أَن تَكْتُبُوْهُ صَغِيرًا أَو كَبِيرًا إِلَى أَجَلِهِ ذَلِكُمْ أَقْسَطُ عِندَ اللّهِ وَأَقْومُ لِلشَّهَادَةِ وَأَدْنَى أَلاَّ تَرْتَابُواْ إِلاَّ أَن تَكُونَ تِجَارَةً حَاضِرَةً تُدِيرُونَهَا بَيْنَكُمْ فَلَيْسَ عَلَيْكُمْ جُنَاحٌ أَلاَّ تَكْتُبُوهَا وَأَشْهِدُوْاْ إِذَا تَبَايَعْتُمْ وَلاَ يُضَآرَّ كَاتِبٌ وَلاَ شَهِيدٌ وَإِن تَفْعَلُواْ فَإِنَّهُ فُسُوقٌ بِكُمْ وَاتَّقُواْ اللّهَ وَيُعَلِّمُكُمُ اللّهُ وَاللّهُ بِكُلِّ شَيْءٍ عَلِيمٌ {282} وَإِن كُنتُمْ عَلَى سَفَرٍ وَلَمْ تَجِدُواْ كَاتِبًا فَرِهَانٌ مَّقْبُوضَةٌ

“Believers! Whenever you contract a debt from one another for a known term, commit it to writing. Let a scribe write it down between you justly, and the scribe may not refuse to write it down according to what Allah has taught him; so let him write, and let the debtor dictate; and let him fear Allah, his Lord, and curtail no part of it. If the debtor be feebleminded, weak, or incapable of dictating, let his guardian dictate equitably, and call upon two of your men as witnesses; but if two men are not there, then let there be one man and two women as witnesses from among those acceptable to you so that if one of the two women should fail to remember, the other might remind her. Let not the witnesses refuse when they are summoned (to give evidence). Do not show slackness in writing down the transaction, whether small or large, along with the term of its payment. That is fairest in the sight of Allah; it is best for testimony and is more likely to exclude all doubts. If it be a matter of buying and selling on the spot, it is not blameworthy if you do not write it down; but do take witnesses when you settle commercial transactions with one another. And the scribe or the witness may be done no harm. It will be sinful if you do so. Beware of the wrath of Allah. He teaches you the Right Way and has full knowledge of everything. And if you are on a journey and do not find a scribe to write the document then resort to taking pledges in hand.” (Qs. Al Baqarah/The Cow: 282-283)

By the existence of the three matters above, both parties wouldn’t be able to manipulate the number of credits, or delay or hasten the due time, and the likes of the wickedness.

By the existence of mortgaging, creditors will feel safe about his rights, since he’ll be able to sell or to auction the mortgaged goods if the debtors are unable to settle their debts at the due time, or if they tried to make up some reasons to postpone their obligations.

Thus, in times like ours now, where mandates seem to vanish from the hearts of the people, fears to Allah seem to be disappeared, and lawful and unlawful matters are being ignored, practicing the three guidances above, or even just one of it, particularly mortgage, seems to be more and more important.

But of you try to look close to the current phenomena of the creditors and debtors in our society, you’ll find that:

Creditors are very ambitious to lend their money to the debtors, to get the interest of it, a.k.a usury. Thus they are speculating desperately in giving their funds. Banks and funding bodies are in haste to give loans. They do not like to require for mortgaged goods to their debtors candidate, since mortgage will just decrease the number of their debtors, as well as the interest they’ll get. The debtors, on the other hand, dislike the requirements of mortgaging something, since the creditors usually try to obtain more profits by transgressing their rights when they auctioned the mortgaged stuffs, thus the debtors feel like being disadvantaged twice.

On the contrary, the debtors are highly ambitious in obtaining wealth by any means, thus they care less about the forbidden state of usury. The most important thing for them is to expand their business, thus their profits and their wealth will be increased as well. If committing usury, which sin is terribly great, so bad that the lightest of it’s sin is similar to a child who sexually assault his own mother, would such person qualified to be trusted to settle his debt in dignified way? Their principle says: as long as debts can be postponed, why should settle it in time?

Thus, it is not strange that in the real life, both parties are tricking each other in their contract.

One of the temporary solution taken by the creditors, in order to get their fund back, is recruiting the debt collectors, who get used to do violence in collecting the loans. And their harsh attitude must be happened. The creditors will not need to recruit such debt collectors if they haven’t been bored trying to send the bills to the debtors. To use the legal way will be longer and more difficult to do, moreover it’ll cost more, and open the chance for the evil of the judicial mafia.

I’d like you to be honest! Will the banks or financial companies recruit the debt collectors if their debtors settled their debts in time, or even better, before the due time?

That is the picture of society whose life is far from decency, faith, and the laws of Allah; but filled with avariciousness. Allah the Exalted will recompense the evils of some people with the evils of some others. This is the phenomenon, that was depicted by Hasan Al Bashri long ago:

يُعَذِّبُ الله الظَالِمَ بِالظَالِمِ ثُمَّ يُدْخِلُهُمَا النَارَ جَمِيعاً

“Allah will punish the transgressor by the wickedness of other transgressor, and both of them will be plunged in Hell.”

If only our society want to obey the Islamic shari’a, they certainly will not need the service of the debts collectors, since the justice is being upheld, mandate is being fulfilled, forbidden wealth are being avoided, and transgressions and oppressions are being fought against.

The conclusion that we can infer from explanations above is that debt collectors is a forbidden form of business in Islam. Thus, it is not appropriate for you, as a believer of Allah and the Last Day, to tarnish your life with it.

Brother, if you are devastated by this bad conditions, what will you do? Will you just be silent and surrender your faith to the status quo? If that is your choice, be sure that your offsprings will inherit this upsetting condition as well, or even ‘develop’ it into more terrible condition, or, minimally add the long drafts of the victims of this condition.

Brother! Realize that the key of changes that you’re waiting for is in your hand. Try to use that key to change it step by step.

Build some trust, awareness to recompense the kindness of others with a similar or even better kindness, as well as try to establish the spirit to seek the please of Allah in every of your trading transactions.

Burn your spirit to make this world as a field to plant the seeds of happiness in the Hereafter.

Believe that if you have tried to use the key of changes in your hand, it wont be long before your dreams come true. A life that is colored with faithfulness to Allah and piety, trading that is free from usury, and blessed sustenances.

Brother, never underestimate your role in shaping the future of your society. You have a tremendous role, since society consist of you and your friends. Don’t you realize that you have a vital role in the life of your family, your kith and kin, your friends, and your society?

Know that every changes usually starts from one of several high-minded persons.

مَنْ سَنَّ فِى الإِسْلاَمِ سُنَّةً حَسَنَةً فَلَهُ أَجْرُهَا وَأَجْرُ مَنْ عَمِلَ بِهَا بَعْدَهُ مِنْ غَيْرِ أَنْ يَنْقُصَ مِنْ أُجُورِهِمْ شَىْءٌ . رواه مسلم

“Whoever starts to practice a method/pious deed in Islam, will be rewarded for it, and for the deeds of all people who imitate him, without decreasing their rewards at all.” (Narrated by Muslim)

Be that man.

How to do it? By making your appointments whenever you make it, pay it in time, or even faster, and do not forget to recompense the kindness of your brother with the similar thing or even better than that. And if you are the creditor, and your brother is having difficulties on the due time, postpone his bills without requiring any interest. Do not worry that you’ll loose your money, as long as you have a good intention, and being sincere in giving aid, Allah will never waste your deeds and intentions.

Know that whatever your brother does to you, in every aspect of your life, is the return of what you did to him. Abu Qilabah, one of the past time scholars admonished us:

البِرُّ لاَ يَبْلَى وَالذَّنْبُ لاَ يُنْسَى وَالدَّيَّانُ لاَ يَمُوتُ، اعْمَلْ مَا شِئْتَ كَمَا تَدِيْنُ تُدَانُ

“Kindness is eternal, sins will not be forgotten, while Allah The One Who Recompense will never die. Do whatever you like, and as the way you do, that is how you’ll be recompensed.”

Have a nice try, and hopefully you’ll get the rewards of your strives.

May Allah the Exalted bestow upon us all lawful sustenances and bless the sustenance He has given us. And Allah know best.


Author: Ustadz Dr. Muhammad Arifin Badri, M.A.
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One thought on “Question and Answer: Rulings regarding Business of Debt Collector

  1. mohamed ruzmy says:

    I would like to know, is collecting loan with interest while working as a debt collector is permissible in islamic law?

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