Bukhari

Hadith Commentary:
If someone takes a loan, but when he becomes capable of repaying it, he begins to procrastinate, this is excess (injustice). In the view of the Shariah, this is a grave offense, and the court may punish him according to the nature of the crime.
This is not an act that can be overlooked.

Hadith Commentary: The meaning is that if a wealthy person assumes someone else's debt upon himself, then procrastination in its repayment will be injustice (zulm). He should pay it off immediately. Likewise, the one to whom the debt has been referred should also accept this and collect his debt from the wealthy person, and should not refuse such a referral (hawalah). Otherwise, he himself will incur loss in this matter.

Hadith Commentary:
(1)
If a wealthy person has taken a loan from someone, he should repay it according to the agreed terms.
He should not procrastinate and keep giving his creditor new dates every day.
If he does so, this is a wrongdoing.
To remedy this injustice, legal action can be taken.

(2)
According to all commentators, "ghani" and "mali" mean wealthy.
This means that if someone’s debt is transferred to a wealthy person, this suggestion should be accepted, but this ruling is not obligatory; rather, it is in the nature of advice.

Hadith Commentary:
From this, it is derived that for a transfer of debt (hawalah), the consent of the transferor (muheel) and the transferee (muhtaal) is sufficient.
The consent of the person upon whom the debt is transferred (muhtaal alayh) is not necessary.
This is the opinion of the majority (jumhur), whereas the Hanafis have stipulated his consent as a condition as well.

Hadith Commentary:
(1)
The procrastination of a wealthy person will be considered oppression only when the term for repayment of the debt has expired. Furthermore, if a person does not accept the reference (hawalah) of another, then no legal action can be taken against him; however, he has certainly been negligent in fulfilling a moral obligation. He should have fulfilled this obligation, even if he had to bear some financial loss.
(2)
When a person has accepted the reference (hawalah), then its payment becomes obligatory. If he dies, the payment of the reference will be made from his estate, provided that he did not die completely destitute.
(3)
If the person upon whom the reference (muhal alayh) was made dies insolvent, or the judge declares him insolvent, or he gives the reference but there is no witness to it, then the creditor (sahib ad-dayn) will recover his debt from the original debtor (muhil), that is, the first debtor.
Wallahu a‘lam.

Hadith Commentary:

Benefits and Issues:
When a person owes a debt to someone, and he transfers his debt to another person, this is called "hawalah" (transfer of debt), because he is to receive his own debt from another person, or the other person is ready to pay his debt on his behalf. In this way, hawalah or transfer of debt has four pillars.

➊ Muhil:
The one upon whom the debt is actually due, who is also called the "original debtor" (asil).

➋ Dayin (creditor):
The one who is to receive the debt, who is called "muhal" or "muhtal".

➌ Muhtal alayh or Muhal alayh:
The one who is being made responsible for the payment of the debt, or to whom the debt is being transferred.

➍ Muhal bih, Muhtal bih:
Or the debt which is being paid.

If a person has the ability to pay the debt, but despite having the ability to pay, does not pay the debt, this is oppression and injustice. However, the transfer or hawalah of the debt to a person of means is not oppression or injustice. The only condition is that he must be "mali"—that is, he must have the ability and capacity to pay.

According to the majority (Hanafi, Shafi'i, Maliki), it is not obligatory to accept this hawalah or transfer; it is better and preferable. Therefore, for hawalah, the acceptance of the creditor is a condition. But according to Imam Ahmad and the Zahiri scholars, based on this hadith, it is obligatory for the creditor to accept the hawalah.

Similarly, for the validity of hawalah, the acceptance of the muhtal alayh (the one to whom the debt is transferred) to pay the debt, i.e., his acceptance of the hawalah by saying, "I take this debt upon myself," is a condition according to the Hanafis, but not according to the other Imams. However, it is apparent that if he does not accept the payment, then how can the muhal (creditor) recover from him, unless the court compels him.

In this way, after the completion of hawalah, the muhil (debtor) is absolved or discharged from the payment of the debt. According to the three Imams, now the creditor cannot demand the debt from the original debtor in any case. But according to Imam Abu Hanifah, in the case of loss of his right or debt—for example, if the muhtal alayh refuses to pay or becomes bankrupt—then the creditor can demand from the original debtor. Obviously, this is possible only in the case where the debtor (madyun) was not to receive any money from the muhtal alayh, and he had accepted the responsibility of paying the debt merely as a charitable act, and now he is refusing or is no longer able to pay, and the original debtor has the ability to pay. But if he was to receive the debt and has transferred it, or he does not have the capacity to pay, then how can the question of return or recourse arise?

Explanation:
➊:
Despite having the means to repay a debt, not repaying it is procrastination.
Unnecessarily delaying the repayment of a debt is a major sin.

➋:
Transferring one’s own debt to the responsibility of another person is what is called "hawalah" (transfer of debt).
For example, Zaid owes money to Amr, then Zaid arranges for Amr to claim the debt from Bakr by saying that now the repayment of my debt is upon Bakr, and Bakr also accepts this. In such a case, Amr should accept this transfer.
This, in essence, encourages good dealings.

Benefits and Issues:
However, if someone is indigent and there is in reality a delay from him in the repayment of the debt, then this will not be considered oppression. Furthermore, in mutual cooperation, accepting a transfer (hawalah) is the preferable course of action.

(1) The purpose here is that if a wealthy person delays the repayment of a debt, this is impermissible and haram. If the debtor is not wealthy, then his delaying the repayment of the debt will not be considered oppression (zulm). Therefore, it is not permissible to humiliate such a debtor or to punish him; rather, it is required to treat him with gentleness and grant him respite. It should also be remembered that if the debtor is wealthy but his wealth is not accessible to him, then in this situation, his procrastination will not be considered oppression, nor should he be treated as a wealthy debtor.

(2) Sometimes the debtor does not have the means to repay himself, so if he requests the creditor to collect his debt from another person, who will pay on his behalf, and that person also acknowledges that he will make the payment, then noble character demands that the poor man be left alone and the debt be collected from the other person, who is wealthy and has agreed to pay. This act is called "hawalah" in Arabic. This is the opinion of the majority of the scholars. For details, see: (Dhakheerat al-‘Uqba Sharh Sunan al-Nasa’i: 35/300, 301)

(3) "This is oppression"—that is, if a poor person does not have the ability to pay and procrastinates, this is possible, but if a wealthy person delays the repayment of a debt without any reason and continues to do so nowadays, then this is oppression (zulm) for which he may be punished. However, if a person without means delays or pleads, then he should not be wronged, because he is compelled, and the Shari‘ah takes into account every reasonable excuse and genuine necessity, and in any case, supports and assists the one who is compelled.

The details of the reference have already been explained under Hadith number 4692. The purpose here is to show that a debt can be transferred from one person to another. For this reason, the majority of the scholars among the hadith experts and the eminent jurists consider the original debtor to be absolved of responsibility after the transfer (hawalah), even if the second person is also unable to pay, because the debt has been transferred to another party. In terms of evidences, this is the stronger opinion.

Benefits and Issues:
➊
By “the wealthy one” is meant the debtor who possesses the means to repay the debt, whether in cash or some other asset, even if, according to common perception, he is still considered poor.

➋
When one has the ability to repay a debt, delaying its payment is a sin, except in the case where a specific period for repayment was agreed upon in advance and that period has not yet expired. Even in this case, it is preferable to repay before the appointed time. Procrastination means seeking further delay despite having the ability to pay, and this is injustice.

➌
Hawala (transfer of debt) means that the debtor says to the creditor: “Go to such-and-such person; he will pay you the amount.” If the person to whom the creditor is directed is capable and it is expected that he will pay, then the creditor should approach him. If he refuses to pay, the creditor can again demand payment from the original debtor.

➍
If the person to whom the creditor is directed does not outwardly appear capable of repaying the debt, the creditor can refuse to accept the debtor’s suggestion and can demand that the debtor himself, or someone else on his behalf, collect the amount and pay it to him.

Hadith Authentication (Takhrij al-Hadith):
[وأخرجه البخاري 2287، ومسلم 33/1564، من حديث مالك به]
Jurisprudential Points (Tafaqquh):
➊ If a debtor says to the creditor that such-and-such person or institution will pay my debt, then this offer should be accepted provided that the person or institution is trustworthy and agrees to pay the mentioned amount.
➋ Musa bin Maysarah rahimahullah heard a man asking Sa'id bin al-Musayyib rahimahullah: "I am a person who buys on credit and then sells (to someone else)." Sa'id rahimahullah replied: "Do not sell it further until you have taken it into your house." [الموطأ 2/674 ح1417، وسنده صحيح]
● It is understood from this that after purchasing goods on credit from someone, it is not permissible to sell them to another person before taking possession, and this also indicates that trading in shares of companies and the like is also incorrect.
➌ A person who, despite having wealth and property, does not repay his debt is an oppressor; therefore, he is a transgressor (fasiq), and his testimony is not acceptable.
➍ Disciplinary action can be taken against a person who delays repayment of debt without a valid Shar'i excuse, provided there is support from those in authority. However, if a debtor is in severe hardship and has nothing with which to pay, then no action should be taken against him; rather, granting him respite is meritorious, and forgiving the debt is among the best of deeds. See: Surah al-Baqarah: 280
➎ Laziness and procrastination in repaying debts is the way of the Jews. See: Surah Al 'Imran: 75, whereas the people of faith fulfill their promises and repay debts on time. See: [فتح الباري 4/466 تحت ح2287]
➏ The elimination of matters that cause division and hatred in hearts is beloved and sought after in the religion of Islam.
➐ The Messenger of Allah sallallahu alayhi wa sallam said: "Whoever takes people's wealth (as a loan) intending to repay it, Allah will repay it on his behalf (i.e., will provide the means for repayment), and whoever takes it intending not to repay, Allah will destroy him." [صحيح بخاري : 2387]
➑ There is a deep connection between debt and intention. The Messenger of Allah sallallahu alayhi wa sallam said: "Whoever among the Muslims takes a loan and Allah knows that he intends to repay it, Allah will settle his debt in this world." [سنن ابن ماجه : 2408، سنن النسائي : 4690، حسن حديث هے۔]
And regarding the opposite intention, it is stated: "Whoever takes a loan and firmly intends not to repay it, he will be presented before Allah as a thief." [سنن ابن ماجه : 2410، حسن]

Takhrij:
«أخرجه البخاري، الحوالات، باب الحوالة وهل يرجع في الحوالة، حديث:2287، ومسلم، المساقاة، باب تحريم مطل الغني، حديث:1564، وأحمد:2 /463.»©Explanation:
➊ In this hadith, the concept of "hawalah" (transfer of debt) is mentioned, for which two meanings have been explained: one is that the debtor provides a personal guarantee for his debt, i.e., a person says to another, "Lend so-and-so some money; I take responsibility for its repayment."
And the second is that the debtor refers the creditor to his own debtor; for example: Zaid is to receive one thousand rupees from Khalid, and Khalid is to receive one thousand rupees from Hamid, so Khalid says to Zaid, "You may collect my debt from Hamid."
The Shari‘ah has also permitted this situation, provided that Hamid acknowledges that he indeed owes Khalid the debt and that he will pay the one thousand rupees to Zaid.
➋ The words of this hadith, "fal-yattabi‘" and "fal-yahtal," both have the same purport: that he should accept this offer.
➌ According to the literalists (Ahl al-Zahir), this ruling is for obligation, but the majority (jumhur) have interpreted it as recommendation (istihbab).
➍ In the Arab countries, a bank draft is called "hawalah."
And the bank that issues the draft gives a receipt to the depositor, stating that this amount may be collected from such-and-such bank through this receipt.
This is the modern, prevalent system of hawalah, which is entirely in accordance with the permission of the Shari‘ah, insha’Allah.

Benefit:
In this hadith, the importance of repaying a loan on time has been mentioned. The one who possesses wealth should not procrastinate in repaying a loan, rather, the loan should be repaid at its due time.

Here, as a point of caution, it is submitted that some people unjustly harass the debtor and remain engaged in trying to humiliate them. The creditor should also consider that if the debtor is truly in difficulty, then he should forgive the loan, and forgiving is more beloved to Allah Ta'ala. ()