In the Name of Allaah, The Most Merciful, The Ever Merciful. May Allaah Bless your efforts and Reward you.
My question is: I am a merchant and have a store, and a client takes commodities from me on credit, and his debt has risen to 40,000 dollars. He repays in installments and takes goods on a weekly basis. One day, I needed 10,000 dollars and said to him: "Give me 10,000 dollars in cash now, and I would reduce them as 11,000 (instead of 10,000) from your debt." Please advise me whether this dealing is valid or invalid. May Allaah Reward you.
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 ‘alayhi wa sallam, is His Slave and Messenger.
This dealing mentioned by the questioner is impermissible, for it is to cancel part of the debt in return for immediate payment of another part of that debt. That is impermissible in the sight of the four leading Imaams, as it is usury, known among the scholars under the rule: 'Reduce (part of the debt) and hasten (to pay some thereof prematurely before the due time).'
According to the composers of the Juristic Encyclopedia:
The majority of the scholars of Fiqh are of the opinion that if one owes another a deferred debt, and the debtor says to the creditor: 'Reduce part of the debt and I would immediately pay you the remaining portion thereof", that this is impermissible in the sight of the Hanafi, Maaliki, Shaafi‘i and Hanbali scholars. It was also disliked by Zayd ibn Thaabit, Ibn ‘Umar, Al-Miqdaad Sa‘eed ibn Al-Musayyib, Saalim, Al-Hasan, Hammaad, Al-Hakam, Ath-Thawri, Haytham, Ibn ‘Ulayyah and Is-haaq . It was narrated that a man asked Ibn ‘Umar about that, whereupon he forbade him from doing it. Then, he asked him once again, whereupon he said, "This (man) wants me to make it permissible for him to consume usury." It was also narrated on the authority of Zayd ibn Thaabit that he forbade it. It was narrated on the authority of Al-Miqdaad that he said to two men who did so, "Both of you have been informed of war (against you) from Allaah and His Messenger."
Allaah Knows best.
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