How is the proceeds of a sale distributed when debts are owed to a single person versus multiple creditors?
General Chapter
Al-Mughni
Book of the Insolvent (Bankruptcy)
Primary text
If the debt belongs solely to one individual, the proceeds of the sale are given to that person immediately, as there is no need for delay. If there are multiple creditors and the proceeds can be divided, they are distributed immediately without postponement. If division is not possible, the funds are deposited with a trustworthy person until a division can be made. If storage requires a fee (gharamah), that amount is paid to the custodian.