Settling A Debt To Heirs Of An Estate With Shares

Question

Please advise me as to the following situation:

Someone owed my late father (may ALLAH grant him Jannatul Firdous) money, but instead of paying it back in cash they returned it to the heirs in shares.

However some of those shares are of haraam institutes eg. banks and a tabacco company. What do i do now?

Is it fair to say the actual amount owing is halaal and may be utilized and the rest of the growth with respect to the haraam shares be given away ?

Currently I have left the share portfolio as is, I now know how to trade and will sell all that is haraam. I am aware that interest accumulates each year on shares and have already made arrangements to get rid of it.

Please do let me know what is the correct way of dealing with this situation.

Darul Ifta, Darul Uloom Azaadville · Accepted Answer

It is necessary that the actual debt incurred by the debtor is paid to your late father’s estate. The debtor cannot settle his outstanding debt by transferring his shares to the heirs of the estate. He should cash his shares and settle his debt in the same currency as was received from your late father, in other words, if he took R20 000.00 cash from your late father, he should reimburse the estate with R20 000.00 cash.

Yes, if each heir agrees to purchase shares that belong to the debtor at a mutually agreed price (if the shares are Shariah compliant), and the sale price due (by the heir) is settled against his portion of inheritance (that is due to him), then the sale will be valid and such a compromise/agreement will be in order. This will effectively mean that each heir will be required to individually purchase a share from the debtor, settle the purchase price against the debt due to him, and in this way recoup his portion of inheritance.

The other option is that the debtor appoints the executor of the estate to cash all the shares on his behalf and reimburse the estate for his outstanding debts. If there happens to be a shortfall, the debtor will fill it in, and if there happens to be any amount over and above the debt, it will be returned to the owner of the shares (the debtor). Adopting this procedure will also be acceptable.

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