Importance of Settling Debts
As I mentioned previously, an account in relation to the importance of paying off debts is narrated by Hazrat Jabir. Once, a companion passed away in a state whilst he was in debt of two Dinar and the Holy Prophet (sa) refused to personally offer his funeral prayer. Upon hearing this, another companion took the responsibility of paying off his debt, as a result of which the Holy Prophet (sa) led his funeral prayer. The following day, the Holy Prophet (sa) enquired from the companion who took this responsibility upon himself whether or not he had paid off the debt of two Dinar.
(Masnad Ahmad bin Hanbal, Vol. 5, pp. 104-105).
Thus, this is the importance of paying off debts and the concern one should show in this regard.
There is another narration by Hazrat Jabir in which the Holy Prophet (sa) stated, “Whatever a believer leaves in terms of wealth and property, it is inherited by his family and relatives. Moreover, if he leaves behind a debt and his property and the wealth he leaves behind are not sufficient in order to pay off the debt, or in the case that he leaves behind children without any means of support, his orphaned children and the payment of the debt will be taken care of.”
(Sahih Muslim, Kitabul Jumuah, Hadith No. 2005)
In other words, the government and those in authority will take the responsibility for this. The upbringing of orphans and making arrangements for their expenditures have greatly been emphasised in the Holy Quran. Hence, for this very reason the Holy Prophet (sa) said that this is the responsibility of the government.
It seems as if these are two separate narrations. On the one hand, the Holy Prophet (sa) refused to offer the funeral prayer of a person who was in debt of two Dinars but on the other hand, he said that it is the responsibility of the government. These are referring to two different occasions. The first incident highlights the importance of debts to those that take loans unnecessarily and also urges their relatives and those left behind to take the responsibility of paying off their debts.
In the second account, the Muslim government has been made responsible for the upbringing of orphaned children and if the property left behind by the deceased person does not suffice in order to pay off the loan, the government should take the responsibility for its payment.
This is the guidance by the Holy Prophet (sa) as to how Muslim governments, should care for its citizens. It is a great misfortune that within Muslim countries, the rights of their citizens are mostly usurped.