The Ruling on Settling a Deferred Debt for Less or More

Question : If he settles with him for a deferred hundred with fifty due immediately, that is not permissible, because immediate sale is not permissible. If he settles with him for the immediate amount with a lesser deferred amount, it is not valid, because the immediate amount does not become deferred by deferral, and what he waives has no counterpart.

Answer : If he settles for the immediate amount with a greater amount, it is forbidden, a fortiori, because this is what is called flipping the debt. For example, if a hundred became due on him and he said, "I have nothing," and the other said, "I will settle with you for it to be one hundred and twenty over a year," this is forbidden. The correct view regarding the issue of settlement is that if he settles for a deferred debt with a portion of it immediately, there is no harm in it. There is no difference between saying "I have waived it" and saying "I have settled it," because the criterion is meanings, not words. Therefore, the correct view is that if he settles for a deferred debt with a portion of it immediately, there is no harm, and what he waives has no counterpart unless he waives it voluntarily without compensation.