What is the ruling of the Sharia on a Muslim paying a fixed and specified interest to a non-Muslim creditor if he is late in repaying the price of goods he purchased on credit, and the debtor is unable to pay?

If a person buys an item with a deferred payment, it is not permissible to stipulate that they pay interest or an increase in price if they are late in payment, because that is forbidden usury (riba). The International Islamic Fiqh Academy has issued a resolution prohibiting any increase on a debt if the buyer delays in paying installments. If the seller stipulates a late payment penalty, it is not permissible to enter into this contract, even if the buyer intends to pay on time, because that constitutes an acknowledgment and acceptance of the usurious condition, and the buyer might actually fall into usury.