Is a bankrupt individual under injunction capable of entering into obligations or incurring debt?
General Chapter
Al-Mughni
Book of the Insolvent (Bankruptcy)
Primary text
If the bankrupt individual acts regarding their personal liability (Dhimmah), such as purchasing, borrowing, or guaranteeing a debt, the transaction is valid. This is because they are considered capable of transacting, and the injunction specifically targets their property, not their personal liability. However, those who extend credit to the bankrupt individual after the injunction are not to share in the distribution with the primary creditors because they consented to the risk, either by knowing the person was bankrupt or by failing to exercise due diligence, as bankruptcy is often publicly known. Any such debt only becomes enforceable against the individual after the injunction is lifted.
Supporting text
A dissenting view, chosen by Ibn al-Mundhir, posits that creditors who extend credit after the injunction should share equally with the primary creditors, as the debt is established prior to the lifting of the injunction, similar to a debt proven by testimony.