Tirmidhi

Explanation:
1:
That is, his matter remains pending; no decision is made regarding his salvation or destruction.

2:
This is specific to the person who possesses enough wealth with which he can repay the debt. As for the person who does not have wealth and dies in such a state that he had a firm intention to repay the debt, then regarding such a person, it is mentioned in the hadith that Allah Ta'ala will pay his debt.

Note:
(This is correct, being supported by the above hadith.)

Benefits and Issues:

➊
The meaning of "hanging" is that even after death, the responsibility of repayment remains upon him, and he is not able to fulfill it; therefore, he remains in distress.
Or it means that he is not granted permission to enter Paradise.

➋
In financial rights, deputation (niyabah) is valid, meaning that if someone pays on behalf of another, then the debt, etc., is considered paid, and he is absolved of that responsibility before Allah as well.

➌
The debt of the deceased should be paid before distributing the inheritance.
If the estate is insufficient, the heirs should pay the debt from their own wealth.

Lexical Explanation:
«مُعَلَّقةٌ » is derived from (baab taf‘eel), meaning that the blessings and favors he is entitled to are withheld from him; neither is a decree of salvation issued for him nor of destruction.
«بِدَيُنِهِ » has a fathah on the letter “dal.” It refers to a debt and everything whose payment is obligatory upon the deceased.
« حَتّٰي يُقْضٰي عَنْهُ» is in the passive form, meaning until that debt is paid on his behalf.

Benefits and Issues:
➊ This hadith shows that the rights of people (huquq al-‘ibad) are not forgiven for the deceased unless the one to whom the right was due forgives it himself or someone else pays it on his behalf. Similarly, the burden and weight of debt remain upon the deceased until it is paid on his behalf, whether a relative pays it, or someone from among his friends and companions, or the state pays his debt as a citizen. From this, consider that this wealth was taken by the deceased with the intention of returning it with the owner’s consent; until it is repaid, the deceased remains suspended because of this debt. And what will be the fate of those who acquired someone else’s property or wealth through fraud, deception, or robbery?
➋ If the deceased has left behind enough wealth that his debt can be paid from it, then the heirs are obligated to pay the debt from his wealth before anything else. If he was poor and did not leave enough in his estate to cover the debt, then the Islamic state is obligated to pay his debt. Thus, the Prophet sallallahu alayhi wa sallam said: “Whoever dies leaving wealth, it is for his heirs, and whoever leaves a debt, its responsibility is upon us.” [صحيح البخاري الاسقراض ، حديث : 2398 ۔ وصحيح مسلم ، الفرائض ، حديث 1619]
And sometimes he said: “Its responsibility is upon Allah and His Messenger.” [سنن ابن ماجه ، ابواب الفرائض ، حديث 2738]
From this, it is understood that debt is not forgiven, because it pertains to the rights of people (huquq al-‘ibad).