Is it permissible to borrow money from a person who is known to deal in haraam things and to be engaged in haraam actions?.
Answer
Praise be to Allaah.You should not borrow from this person or have any dealings with him so long as he is dealing in haraam things or is known for haraam dealings, whether that is riba or anything else. You should not deal with him or borrow from him, rather you should avoid that and keep away from it.
But if he deals with haraam things and non-haraam things, i.e., his dealings are a combination of good and bad, then there is nothing wrong with it, but it is better not to do that, because the Prophet (peace and blessings of Allaah be upon him) said: “Leave that which makes you doubt for that which does not make you doubt.” Narrated by al-Tirmidhi. 2518; classed as saheeh by al-Albaani in Saheeh al-Tirmidhi. And he (peace and blessings of Allaah be upon him) said: “Whoever avoids doubtful matters will protect his religious commitment and his honour.” Agreed upon. And he (peace and blessings of Allaah be upon him) said: “Sin is that which wavers in your heart and you dislike the people finding out about.” Narrated by al-Tirmidhi, 2389; classed as saheeh by al-Albaani in Saheeh al-Tirmidhi.
So the believer should keep away from doubtful matters. If you know that all his dealings are haraam and that he trades in haraam things, then you should not deal with such a person or borrow from him. End quote.
Majmoo’ Fataawa Ibn Baaz, 19/286.
Ibn ‘Uthaymeen may Allaah have mercy upon him said, “Some scholars have held that when the prohibition is associated with the means through which the money was earned, then the sin is on the person who earned it and has nothing to do with the person who earns it through lawful transactions with the one who had earned it unlawfully. This is in contrast to what is deemed prohibited in itself such as alcohol, unlawfully usurped items of wealth, and so on. This opinion is strong and well supported by evidence. The Prophet, sallallaahu ‘alayhi wa sallam, bought food for his family from a Jew. He, sallallaahu ‘alayhi wa sallam, ate from the sheep that a Jewish woman from Khaybar gave him. He, sallallaahu ‘alayhi wa sallam, also accepted the invitation of a Jewish man. It is well-known that most of the Jews deal with usury and consume unlawfully usurped wealth.” [Al-Qawl Al-Mufeed]
Shaykhul-Islam Ibn Taymiyyah may Allaah have mercy upon him said, “With regard to property that has been taken under coercion or acquired through invalid contracts, it is incumbent on a Muslim who knows about that to avoid it [such a property]. If I know that a person stole some property, or he betrayed a trust or usurped it and took it from someone by force and unlawfully, then it is not permissible for me to take it from him, whether as a gift or for a payment for a purchase or as payment of wages or as payment of a debt. This wealth is the property of the one who has been wronged. If the person does not know how this man earned his wealth, what is unknown is effectively the same as what is non-existent. The fundamental principle is that whatever is in the possession of the Muslim and he claims to be his is considered his property. As long as I do not know the source of the person’s wealth, I should rely on the fundamental principle about it. If this person has actually usurped and unlawfully seized this property, but I do not know that, it is deemed his property [by me]; what is unknown is effectively the same as what is non-existent. However, if this man is known for earning his wealth through unlawful means, the Muslim should refrain from dealing with him out of piety and consciousness of Allaah. As for the person whose wealth is mostly unlawful, the scholars have held different opinions about it. As for the transactions with a Muslim man the source of whose wealth is unknown, there is no doubt about the permissibility of engaging in financial transactions with him as a fundamental rule. If the person refrains from dealing with such a Muslim out of religious prudence, he has committed a religious innovation that has nothing to do with what Allaah has revealed.” [excerpted with slight adaptation from Majmoo‘ Al-Fataawa]