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Sunan Ibn Majah 2360 (Book 13, Hadith 53) #31712
Bankruptcy and Ownership Rights

SUMMARY: The Prophet ﷺ ruled that if a person becomes bankrupt, the owner of the product has more right to it.

It was narrated that Ibn Khaldah, who was a judge in Al-Madinah, said: We came to Abu Hurairah and asked him about a companion of ours who had become bankrupt. He said: "This is what the Prophet ruled: 'Any man who dies or becomes bankrupt, the owner of the product has more right to it, if he finds the exact thing".
حَدَّثَنَا إِبْرَاهِيمُ بْنُ الْمُنْذِرِ الْحِزَامِيُّ، وَعَبْدُ الرَّحْمَنِ بْنُ إِبْرَاهِيمَ الدِّمَشْقِيُّ، قَالاَ حَدَّثَنَا ابْنُ أَبِي فُدَيْكٍ، عَنِ ابْنِ أَبِي ذِئْبٍ، عَنْ أَبِي الْمُعْتَمِرِ بْنِ عَمْرِو بْنِ رَافِعٍ، عَنِ ابْنِ خَلْدَةَ الزُّرَقِيِّ، وَكَانَ، قَاضِيًا بِالْمَدِينَةِ قَالَ جِئْنَا أَبَا هُرَيْرَةَ فِي صَاحِبٍ لَنَا قَدْ أَفْلَسَ فَقَالَ هَذَا الَّذِي قَضَى فِيهِ النَّبِيُّ ‏ "‏ أَيُّمَا رَجُلٍ مَاتَ أَوْ أَفْلَسَ فَصَاحِبُ الْمَتَاعِ أَحَقُّ بِمَتَاعِهِ إِذَا وَجَدَهُ بِعَيْنِهِ

TOPICS
sahib  *  bankruptcy  *  ownership  *  product  *  qaradh

QUICK LESSONS:
Make sure you own things legally and ethically so you don't lose your possessions due to unfortunate circumstances like bankruptcy or death .

EXPLANATIONS:
This hadith is about bankruptcy and ownership rights. It was narrated by Ibn Khaldah, who was a judge in Al-Madinah. He said that they asked Abu Hurairah about a companion of theirs who had become bankrupt. Abu Hurairah then told them what the Prophet (ﷺ) ruled regarding this situation - that if someone dies or becomes bankrupt, then the owner of the product has more right to it, if he finds the exact thing. This means that when someone goes bankrupt, they are no longer able to pay back their debts and so any products or items owned by them can be taken away from them as payment for their debt. However, if an exact item is found with another person who owns it legally then they have more right to keep it than anyone else does. This teaches us not only about bankruptcy but also about ownership rights - we should always make sure we own things legally and ethically so that we do not end up losing our possessions due to any unfortunate circumstances such as bankruptcy or death.

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