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Fatwa CenterSelling a debt to a debtor
Question
Is it permissible to sell a debt? A cement company owes us money, so is it permissible to exchange the debt into cement and sell the cement before receiving it?
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu 'alyhi wa sallam, is His slave and Messenger.
Your question raises two issues: first, selling a debt to a debtor for a certain item; second, selling a sold commodity before receiving it.
As regards the first issue, there is no difference among scholars on the permissibility of transferring a debt to the ownership of a debtor for compensation, or even for no compensation. However, the Maaliki, Hanafi, and Hanbali scholars, and the Shaafi‘i scholars (in one of their views) stated the following: If a creditor sells a debt to a debtor, such as the company in this case, for a certain item, such as cement, then it is a condition for the validity of this sale that the creditor receives the compensation before leaving the sale meeting, to avoid the consequent selling of a debt for a debt. This is because Ibn Al-Munthir, Ibn Rushd, and others 
reported the consensus of scholars on the prohibition of selling a debt for a debt.
As for the second issue, it is not permissible to sell a moveable object before receiving it, according to the preponderant opinion of the scholars. This is based on a Hadeeth on the authority of Hakeem ibn Hizaam 
who said, ‘‘O Messenger of Allaah, I execute sale transactions. So, which is permissible and which is impermissible for me among them?” The Prophet, sallallaahu ‘alayhi wa sallam , said: “When you buy something, do not sell it until you receive it.’’ [Ahmad]
It was also narrated on the authority of Zayd ibn Thaabit that the Messenger of Allaah, sallallaahu ‘alayhi wa sallam, forbade selling a product in the place where it was bought until the merchants had taken possession of it and moved it to their own property. [Abu Daawood]
In short, you can sell the debt to the cement company provided that you take possession of the cement in the same place where the purchase was concluded, then after receiving it, you can sell it; since it is impermissible for you to sell it before you receive it.
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