What happens upon the maturity of the debt secured by the borrowed collateral?
General Chapter
Al-Mughni
Book of Pledges (Collateral)
Primary text
When the secured debt matures and the debtor fails to repay, the creditor is permitted to sell the collateral to recover the debt amount. Following this, the original lender (Ma'ir) has recourse against the borrower (Rahin) for damages.
Supporting text
If the collateral is sold for less than its assessed value, the borrower is liable to compensate the lender for the full assessed value because the borrowed item is guaranteed (Damin). If the collateral is sold for more than its assessed value, the lender only retains the actual sale price, as the item belonged to the lender, and thus any surplus belongs to them. Similarly, if the creditor forgives the debt owed by the borrower, the entire sale price reverts to the owner (Ma'ir). If the collateral perishes, whether through negligence or not, the borrower is liable for its assessed value because the borrowed item is considered guaranteed.