Does a deferred debt become immediately due upon the debtor's bankruptcy?
General Chapter
Al-Mughni
Book of the Insolvent (Bankruptcy)
Primary text
There is one established narration that a deferred debt becomes immediately due upon the bankruptcy of the debtor. This is supported by the reasoning that bankruptcy affects the assets, thus nullifying the deferment, akin to death. However, the stronger position maintains that the deferment is a right belonging to the bankrupt person and is not nullified by their bankruptcy, similar to their other rights. Furthermore, bankruptcy does not cause the debtor's own assets to mature, so it should not mature the liabilities against him, unlike insanity or unconsciousness. It remains a deferred debt on a living person and does not mature early, like any other debtor. Furthermore, it is not conceded that death causes maturity; if it did, the difference is that the bankrupt's liability structure remains partially intact, unlike the deceased whose estate is dissolved.
Supporting text
Abu al-Khattab mentioned an alternative narration that the debt does become due, a view held by Malik. Al-Shafi'i also holds both views. This is argued based on the similarity between bankruptcy and death in affecting the financial estate.