How to deal with Education and Car loans

Question

I’m a recent American convert to Islam; Alhamdulillah, I’m settling into the faith wonderfully. I fell in love with so many pieces of the religion, and I’m now trying to organize and reconcile parts of my life that are not in line with shari’a law. I have a lot of student debt and a car loan that I’m unsure how to manage. I was trying to find resources of entities that could professionally advise me, but I’m finding it difficult. This is really important, and it’s on my mind constantly.

Should I pay off the remaining loans and interests? Should I let my car be repossessed? Even when filing bankruptcy, student loans don’t go away. What can I do about that?

السلام عليكم ورحمة الله وبركاته

 

My advice regarding your debt is as follows:

 

  1. If you have the financial means to settle your debt, it is advisable to prioritize paying off the debt as soon as possible, especially considering the potential for interest accumulation.
  2. In the event that you are unable to immediately clear your debt due to financial constraints, there are several options you may consider:

2.1. Whenever you receive or earn any amount of money, direct it towards repaying your debt rather than spending it on unnecessary things.

2.2. Explore the possibility of obtaining an interest-free loan from an individual or an organization that would allow you to pay them off monthly at an affordable installment.

2.3. Approach a zakah organization or institution and request zakah from them. As a debtor who cannot pay his debt, you fall under one of the eight categories of those entitled to receive Zakah.

2.4. Regarding your car, if the vehicle is not an immediate necessity, consider selling it in order to settle your debt. If the car is essential, then the options mentioned above should be explored.

  1. Additionally, you may also recite the following Prophetic supplications for the removal of debt:

3.1. In salah, before concluding the prayer with salam, pray:

اللّٰهُمَّ إني أعُوذُ بِكَ مِنَ المأْثَمِ وَالمَغْرَم

Allahumma inni a’udhubika min al-ma’tham wa al-magram

O Allah, I seek your protection from sin and debts.

 

3.2. Recite every morning and evening:

اللهُمَّ إنّي أَعُوذُ بِكَ مِنَ الهَمِّ والْحَزَن، وأعوذ بك مِنَ الْعَجزِ وَالكَسل، وأعوذ بك من الجُبْنِ والبُخْل، وأعوذ بك مِنْ غَلَبَةِ الدَّين وَقَهْرِ الرجال


Allahumma inni a’udhu bika min al-hammi wa al-hazan, wa a’udhu bika min al-‘ajzi wa al-kasl, wa a’ udhu bika min al-jubni wa al-bukhl, wa a’udhu bika min ghalabah al-dayn wa qahr al-rijal.

O Allah, I seek refuge in You from worries and difficulty, and I seek refuge in You from inability and laziness, and I seek refuge in You from cowardice and miserliness, and I seek refuge in You from the dominance of debt and being subjected to man.

 

We pray that Allah facilitates ease in your affairs and that you are able to overcome your debt in the nearest future, Amin.

 

والله تعالى أعلم

And Allah knows best.

(Date Issued: 31-07-2022)

MJC (SA)

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