Wa-in kana thoo AAusratin fanathiratun ila maysaratin waan tasaddaqoo khayrun lakum in (surah Baqarah: 280)

Tafseer Tafheem-ul-Quran by Syed Abu-al-A'la Maududi

(2:280) If your debtor be in straitened circumstances, give him time till his monetary condition becomes better. But if you remit the debt by way of charity, it would be better for you, if you only knew it. *324

Wa in kaana zoo `usratin fanaziratun ilaa maisarah; wa an tasaddaqoo khairul lakum in kuntum ta`lamoon

*324). This verse is the basis of the Islamic regulation that if a person has become incapable of paying off his debt, the court will force the creditors to grant him respite for payment. In fact, under certain circumstances, the court is entitled to remit a part of his debt and, at times, the whole of it. It is mentioned in the Hadith that once a person suffered loss in his trade and became greatly burdened with debt and the case was brought to the notice of the Prophet. The Prophet urged the people to help their brother in his distress. They came to his assistance but the amount of help was not enough to wipe out his debts. Then the Prophet approached the lenders and asked them to accept whatever amount was available and to grant remission to the borrower because of his inability to make further payments. Muslim jurists have made it clear that a debtor's residential house, eating utensils, clothes and the tools which he uses for earning his livelihood may not be confiscated in any, circumstances whatsoever for non-payrment of loans. (For relevant discussion and textual evidence see the commentaries on this verse in Ibn Kathir, Jassas, and Qurtubi - Ed.)