When does the seller regain the right of rescission even if the item was mortgaged?
General Chapter
Al-Mughni
Book of the Insolvent (Bankruptcy)
Primary text
The seller regains the right of rescission if the buyer redeems the mortgage before the buyer's bankruptcy, or if the seller is absolved of his debt. This is because the seller then finds his property in kind with the buyer.
Supporting text
Similarly, if the item is mortgaged when the buyer becomes bankrupt, the seller regains the right of rescission if the mortgagee absolves the buyer of the debt, or if the debt is paid from another source.