Debts and Obligations of the Deceased

After funeral and burial expenses have been satisfied, Islamic law requires that all outstanding debts and obligations of the deceased be settled before any inheritance is distributed to the heirs.

Principles Governing Debts and Obligations

Payment of debts is obligatory. All lawful debts owed by the deceased must be paid from the estate, regardless of whether the debts are owed to individuals, institutions, or the state.
Debts take precedence over inheritance. No portion of the estate may be distributed to heirs until all known debts and obligations of the deceased have been fully discharged.
Types of debts include both financial and moral obligations. This includes loans, unpaid wages, unpaid rent, outstanding bills, and any other enforceable financial liabilities.
Debts owed to Allah and debts owed to people. Obligations such as unpaid zakat, expiations (kaffārah), or vowed charity (nadhr) should be fulfilled from the estate, as scholars equate these with debts owed to human beings.
If the estate is insufficient. If the estate is insufficient to cover all debts, the available assets are used proportionally to settle them. Heirs are not personally liable for the deceased’s debts unless they voluntarily choose to assume responsibility.
Disclosure of debts is a moral duty. The deceased is encouraged during his or her lifetime to clearly disclose all debts so that they may be properly settled after death.