Seriousness of Debt in Islam
Question

I am working to help my husband for our living, as his salary is not sufficient for our basic needs and education of our kids. I have borrowed some money from different people to settle our other debts. Alhamdulillah, I can say that ALLAH tests our faith in terms of “money”. One day, I was listening to a lecture about severe punishment for a Muslim who has not settled his debts and he also mentioned that during the time of Prophet Muhammad (peace and blessing be upon him), he never prayed to the deceased person who has not settled his debts. The lecturer mentioned a dua but I was not able to write it down. Can you please tell me what are punishments in the grave and dua to help me settle my debts?
Praise be to Allah.Definition of debt according to Islamic jurisprudence
The jurists define Dayn (debt) as an obligation to be fulfilled, as it says in Al-Mawsu`ah Al-Fiqhiyyah (21/102).
The linguistic meaning of the word debt in Arabic has to do with submission and humiliation. The connection between the Shar`i meaning and the linguistic meaning is clear. The debtor is a prisoner, as the Prophet (peace and blessings of Allah be upon him) said: “Your companion is being detained by his debt.” (Narrated by Abu Dawud, 3341; classed as sound by Al-Albani in Sahih Abu Dawud)
The Gravity of debt in Islamic teachings
 Islam takes the matter of debt very seriously and warns against it and urges the Muslim to avoid it as much as possible.
It was narrated from `Aishah (may Allah be pleased with her) that the Prophet (peace and blessings of Allah be upon him) used to say in his prayer: “Allahumma inni a`udhi bika min Al-ma`tham wal-maghram (O Allah, I seek refuge with You from sin and debt).” Someone said to him: “How often do you seek refuge from debt!” He said: “When a man gets into debt, he speaks and tells lies, and he makes a promise and breaks it.” (Narrated by Al-Bukhari, 832 and Muslim, 589)
An-Nasa`i (4605) narrated that Muhammad ibn Jahsh (may Allah be pleased with him) said:
“We were sitting with the Messenger of Allah (peace and blessings of Allah be upon him) when he raised his head towards the sky, then he put his palm on his forehead and said: “Subhan-Allah!  What a strict issue has been revealed to me!” We remained silent and were afraid. The following morning I asked him, “O Messenger of Allah, what is this strict issue that has been revealed?” He said, “By the One in Whose hand is my soul, if a man were killed in battle for the sake of Allah, then brought back to life, then killed and brought back to life again, then killed, and he owed a debt, he would not enter Paradise until his debt was paid off.” (Classed as sound by Al-Albani in Sahih An-Nasa`i, 4367)
The Prophet (peace and blessings of Allah be upon him) refrained from offering the funeral prayer for one who had died owing two dinars, until Abu Qatadah (may Allah be pleased with him) promised to pay it off for him. When he saw him the following day and said, I have paid it off, the Prophet (peace and blessings of Allah be upon him) said: “Now his skin has become cool for him.”(Narrated by Ahmad in Al-Musnad, 3/629; classed as sound by An-Nawawi in Al-Khulasah, 2/931 and by Ibn Muflih in Al-Adab Al-Shar`iyyah, 1/104)
Ibn Hajar (may Allah have mercy on him) said in Fat-h Al-Bari (4/547):
“This Hadith indicates how difficult the issue of debt is, and that it should not be undertaken except in cases of necessity.” (End quote)
It was narrated from Thawban (may Allah be pleased with him) that the Messenger of Allah (peace and blessings of Allah be upon him) said:
“Whoever dies free from three things – arrogance, cheating and debt – will enter Paradise.” (Narrated by At-Tirmidhi, 1572; classed as authentic by Al-Albani in Sahih At-Tirmidhi)
It was narrated that Abu Hurayrah said: The Messenger of Allah (peace and blessings of Allah be upon him) said: “The soul of the believer is suspended because of his debt until it is paid off.” (Narrated by At-Tirmidhi, 1078)
Al-Mubarakfuri (may Allah have mercy on him) said in Tuhfat Al-Ahwadhi (4/164):
“The words “the soul of the believer is suspended” – As-Suyuti said: i.e., it is detained and kept from reaching its noble destination. Al-`Iraqi said: i.e., no judgement is passed as to whether it will be saved or doomed until it is determined whether his debt will be paid off or not.”
The Salaf emphasise the avoidance of debt
It was also narrated that many of the Salaf warned against debt:
It was narrated that `Umar ibn Al-Khattab (may Allah be pleased with him) said:
“Beware of debt, for it starts with worry and it ends with war.” (Narrated by Malik in Al-Muwatta`, 2/770)
In Musannaf `Abd Al-Razzaq (3/57) it says:
Ibn `Umar (may Allah be pleased with him) said:
“O Humran, fear Allah and do not die in debt, lest it be taken from your good deeds when there will be no dinars and no dirhams.”
Personal and societal impacts of debt
These stern warnings about debt only came because of the negative consequences to which it leads both on an individual level and on a community level.

With regard to the personal level, Al-Qurtubi (may Allah have mercy on him) said in Al-Jami` li Ahkam Al-Quran (3/417):

“Our scholars said: It is a disgrace and a humiliation because it preoccupies the mind and makes one worried about paying it off, and makes one feel humiliated before the lender when meeting him, and feeling that he is doing one a favour when accepting a delay in payment. Perhaps he may promise himself that he will pay it off then break that promise, or speak to the lender and lie to him, or swear an oath to him then break it, and so on. Moreover, he may die without having paid off the debt so he will be held hostage because of it, as the Prophet (peace and blessings of Allah be upon him) said: “The soul of the believer is held hostage by his debt in his grave until it is paid off.” (Narrated by At-Tirmidhi, 1078” All of that undermines one’s religious commitment.

With regard to the community level, specialists have described the negative consequences and the danger it poses to the economy, for example:


Desire for immediate gratification with no thought of the future
Lack of responsibility and self-reliance
Poor distribution of wealth

In order to understand these negative consequences better, please see the study by Shaykh Sami As-Suwaylim entitled Mawqif Al-Shari`ah Al-Islamiyyah min Al-Dayn (6-11)
Permissible conditions for taking on debt in Islam
Based on the above, the scholars have stipulated three conditions for debt to be permissible:

The borrower should be determined to repay it.
It should be known or thought most likely that he is able to repay it,
It should be for something that is permissible according to Shari`ah.

Ibn `Abd Al-Barr (may Allah have mercy on him) said in At-Tamhid (23/238):
“The debt for which a person will be kept out of Paradise – and Allah knows best – is that for which he left behind enough to pay it off but he did not leave instructions to that effect, or he was able to pay it off but did not do so, or he took the loan for some unlawful or extravagant matter and died without having paid it off.
As for the one who took a loan for something lawful because he was poor, and he died without leaving behind anything to pay it off, Allah will not keep him from Paradise because of it, in sha Allah.” (End quote)
Guidance for those in debt
So long as you have taken on a debt so that you can fulfil the duty of helping your husband and family to pay for living expenses, you will be rewarded by Allah for this good deed. I ask Allah to reward you greatly for that. Remember that He will help you to pay off this debt.
The Prophet (peace and blessings of Allah be upon him) said: “The one who takes people`s wealth intending to pay it back, Allah will pay it back for him, and the one who takes it intending to destroy it, Allah will destroy him.” (Narrated by Al-Bukhari, 2387)
Seek help with that by working and striving hard to pay off the debt, and by putting your trust in Allah, and praying to Him to make it easy for you to pay off your debt.
Recommended Du`as for seeking Allah’s help in paying off debts
In the Sunnah there are a number of Du`as which specifically seek the help of Allah in praying off debts. They are:

It was narrated that Suhayl (may Allah have mercy on him) said: Abu Salih used to tell us, when one of us wanted to sleep, to lie down on his right side and say:

“Allahumma Rabb As-samawati wal-ard wa Rabb Al-`arsh il-`adhim, Rabbana wa Rabba kulli shay`in, Faliq Al-habb wan-nawa wa munzil At-Tawrati wal-Injili wal-Furqan, a`udhu bika min sharri kulli shay`in anta akhidhun bi nasiyatihi. Allahumma anta Al-awwal fa laysa qablaka shay`un, wa anta Al-akhir fa laysa ba`daka shay`un, wa anta Adh-Dhahir fa laysa fawqaka shay`un wa anta Al-batin fa laysa dunaka shay`un. Iqdi `anna Ad-dayna wa aghnina min Al-faqri (O Allah, Lord of the seven heavens and the exalted Throne, our Lord and Lord of all things, splitter of the seed and the date-stone, Revealer of the Tawrat and the Injeel and the Furqan [Quran], I seek refuge in You from the evil of all things You shall seize by the forelock [have total mastery over]. O Allah, You are the First so there is nothing before You, and You are the Last so there is nothing after You. You are Adh-Dhahir [the greatest and highest] so there is nothing above You, and You are Al-Batin [aware of the subtlest secrets] so there is nothing closer than You. Settle our debt for us and spare us from poverty).”
He narrated that from Abu Hurayrah, from the Prophet (peace and blessings of Allah be upon him). (Narrated by Muslim, 2713)

It was narrated from `Ali (may Allah be pleased with him) that a Mukatib (slave who had entered into a contract of manumission) came to him and said: “I am unable to pay off my manumission; help me.” He said: “Shall I not tell you some words which the Messenger of Allah (peace and blessings of Allah be upon him) taught me? And if you have debt like the mountain of Seer, Allah will pay it off for you. He said: `Say: Allahumma akfini bi halalika `an haramika wa aghnini bi fadlika `amman siwaka (O Allah, suffice me with what You have permitted so that that I have no need of that which You have forbidden, and make me independent of means by Your bounty so that I have no need of anyone besides You).’” (Narrated by At-Tirmidhi, 2563. It was classed as sound by Al-Albani in Sahih At-Tirmidhi.)

 It was narrated that Abu Sa`id Al-Khudri (may Allah be pleased with him) said:
The Messenger of Allah (peace and blessings of Allah be upon him) entered the mosque and saw an Ansari man whose name was Abu Umamah (may Allah be pleased with him). He said: “O Abu Umamah, why do I see you sitting in the mosque when it is not the time for prayer? He said: Worries and debts, O Messenger of Allah. He said: “Shall I not teach you some words which, if you say them, Allah will take away your worries and pay off your debts?” He said: Yes, O Messenger of Allah. He said:
“Say, morning and evening, `“Allahumma inni a`udhu bika min Al-hammi wal-hazani, wa a`udhi bika min Al-`ajzi wal-kasali, wa a`udhu bika min Al-jubni wal-bukhli, wa a`udhi bika min ghalabat il-dayn wa qahri Ar-rijal (O Allah, I seek refuge with You from worry and grief, and I seek refuge with You from incapacity and laziness, and I seek refuge with You from cowardice and miserliness, and I seek refuge with You from being in debt and from being overcome by men).”
He said; I did that, and Allah took away my worry and paid off my debt. (Narrated by Abu Dawud (1555) Its chain of narration includes Ghassan ibn `Awf; Adh-Dhahabi said: he is not strong. Hence Shaykh Al-Albani classed the Hadith as inauthentic in Da`if Abu Dawud. But the Du`a mentioned – “Allahumma inni a`udhu bika min Al-hammi wal-hazani…” – is confirmed by Al-Bukhari and Muslim in a report other than this story of Abu Umamah (may Allah be pleased with him).
And Allah knows best.