What are the rulings on sale with a deferred payment and checks?
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The questioner : A question regarding transactions of buying and selling, O our teacher. In these days, sales sometimes occur with a specified deferred payment, and sometimes this period is long. In exchange for this, we receive checks. A person may go through circumstances where he needs cash. If the owner of the check offers the one who gave him the check to reduce its value in exchange for taking cash, or conversely, if the one who gave the check feels that the person holding the check is in need of money and negotiates with him, saying, "Give me the checks you have and deduct this amount from them," is there a difference between the two cases? And if the check is sold to another person other than the owner of the check, then we have three cases:
The first case: I, who own the check, offer it to the person who gave me the check.
The second case: The person who gave me the check is the one who offers me the amount of money in exchange for the check.
The third case: Another person who has no connection to the check says, "I will buy the check."
The Shaykh : By reducing its value?
The questioner : By reducing its value.
The Shaykh : In every case, by reducing its value?
The questioner : Yes, exactly.
The Shaykh : Yes, meaning in all three forms, the operative cause is that the value of the check is reduced. Naturally, this is absolutely not permissible because this is riba (usury or interest). It is not permissible to sell a note worth one thousand for nine hundred, for example, because this is buying currency for less than its value, and this is the very essence of riba. However, what is permissible is for the owner of the right, that is, the owner of the check, to relinquish his right to the debtor. For example, if he is owed one thousand, he takes nine hundred instead of the one thousand; this is permissible. But by way of buying and selling for less, this is not permissible.
The questioner : If the debtor is the one who offered, meaning the situation is that I am in need of cash and he negotiated with me regarding the check, does this resemble the first case?
The Shaykh : Is the debtor negotiating with you, or is he unable to pay what is due to him?
The questioner : No, he is able to.
The Shaykh : If it is negotiation, then it is not permissible.
The questioner : He is able, but the check is for a deferred period.
The Shaykh : Well, I have answered you. If he is unable to pay, and the creditor wants to reduce the amount, he has that right. But if he wants to negotiate and trade, meaning buy the greater amount for the lesser, then this is not permissible. All the forms are the same.
The questioner : Meaning, whether it is the debtor or someone other than the debtor?
The Shaykh : They are all the same, as long as the intention is to buy the greater amount for the lesser. However, the debtor has a special relationship with it. If he is unable, for example, or is straitened in paying the one thousand, and the owner of the right comes to him and says, "My brother, I will relinquish the hundred to you, and the nine hundred is sufficient for me," then this is permissible. But as a markup or trade, it is not permissible.
The first case: I, who own the check, offer it to the person who gave me the check.
The second case: The person who gave me the check is the one who offers me the amount of money in exchange for the check.
The third case: Another person who has no connection to the check says, "I will buy the check."
The Shaykh : By reducing its value?
The questioner : By reducing its value.
The Shaykh : In every case, by reducing its value?
The questioner : Yes, exactly.
The Shaykh : Yes, meaning in all three forms, the operative cause is that the value of the check is reduced. Naturally, this is absolutely not permissible because this is riba (usury or interest). It is not permissible to sell a note worth one thousand for nine hundred, for example, because this is buying currency for less than its value, and this is the very essence of riba. However, what is permissible is for the owner of the right, that is, the owner of the check, to relinquish his right to the debtor. For example, if he is owed one thousand, he takes nine hundred instead of the one thousand; this is permissible. But by way of buying and selling for less, this is not permissible.
The questioner : If the debtor is the one who offered, meaning the situation is that I am in need of cash and he negotiated with me regarding the check, does this resemble the first case?
The Shaykh : Is the debtor negotiating with you, or is he unable to pay what is due to him?
The questioner : No, he is able to.
The Shaykh : If it is negotiation, then it is not permissible.
The questioner : He is able, but the check is for a deferred period.
The Shaykh : Well, I have answered you. If he is unable to pay, and the creditor wants to reduce the amount, he has that right. But if he wants to negotiate and trade, meaning buy the greater amount for the lesser, then this is not permissible. All the forms are the same.
The questioner : Meaning, whether it is the debtor or someone other than the debtor?
The Shaykh : They are all the same, as long as the intention is to buy the greater amount for the lesser. However, the debtor has a special relationship with it. If he is unable, for example, or is straitened in paying the one thousand, and the owner of the right comes to him and says, "My brother, I will relinquish the hundred to you, and the nine hundred is sufficient for me," then this is permissible. But as a markup or trade, it is not permissible.
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.