Arabic (تفليس) for judgment of bankruptcy (iflas) or declaration of bankruptcy by court. In shari’a parlance, it stands for interdiction (hajr– حجر) due to unsettled debt (dayn), in which case the court prevents (interdicts) the insolvent debtor from disposing of his wealth. Prevention remains effective till the debtor’s wealth is liquidated and divided among creditors in proportion to their debts (i.e., on a pro rata basis). The judgment of bankruptcy is issued when the creditors formally request interdiction of the creditor’s wealth.

When an insolvent debtor is declared bankrupt (muflis), he cannot be relieved of what he owes (i.e., his status as bankrupt cannot be ended) unless he repays his debts or is discharged by his creditors or the court due to reasons such as fraud, excuse, etc.