What is the legal consequence for a debtor once his insolvency (I'sar) is established before the judge?
General Chapter
Al-Mughni
Book of the Insolvent (Bankruptcy)
Primary text
When a debtor's insolvency is established before the judge, no one has the right to demand payment from him or constantly pursue him. This is the position held by Al-Shafi'i. The basis for this is the verse commanding respite for the indigent: {And if someone is in difficulty, then let there be a delay until a time of ease} (Quran 2:280). Furthermore, whoever is due respite, pursuing them becomes forbidden, similar to a debtor whose debt is deferred. Evidence is also established from the Prophet's statement to the creditors of one whose debt became large from purchased fruit: 'Take what you find, and you will have nothing but that,' narrated by Muslim and Al-Tirmidhi.
Supporting text
Abu Hanifa holds that his creditors retain the right to pursue him without preventing him from earning, but they may enter his house if permitted upon his return, otherwise, they are prevented from entering, based on the hadith, 'The creditor has the hand and the tongue' (referring to the right to pursue/claim). This hadith is contested by some scholars, including Ibn al-Mundhir, who restricts its application to a wealthy person.