Is it permissible for a debtor owing a deferred debt to ask the creditor to forgive a portion in exchange for immediate payment of the remainder?
Chapter on Riba (Usury) and Exchange (Sarf)
Al-Mughni
Book of Sales
Primary text
This transaction is impermissible. This view is held by Zayd ibn Thabit, Ibn Umar, Al-Miqdad, Sa'id ibn al-Musayyab, Salim, Al-Hasan, Hammad, Al-Hakam, Al-Shafi'i, Malik, Al-Thawri, Hushaym, Ibn 'Ulayyah, Ishaq, and Abu Hanifa. Al-Miqdad severely condemned those who engaged in this practice, stating that both parties had declared war against Allah and His Messenger. The prohibition is based on the reasoning that this constitutes the sale of a deferred item for an immediate (different) item, such as if the creditor told the debtor, 'Give me ten dirhams now, and I will cancel the hundred you owe.'
Supporting text
It is narrated from Ibn Abbas, and also attributed to Al-Nakha'i and Abu Thawr, that there is no objection to this practice because the creditor is taking part of his right and relinquishing part of it, which is permissible, similar to a situation where the debt is already due (not deferred).