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HIWALAH - Coggle Diagram
HIWALAH
RULES & CONDITIONS
The transferor must be a debtor to the transferee while in restricted hiwalah, the payer must be the debtor to the transferor
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Restricted hiwalah
The transferred debt must be equal to the debt owed to the transferee in terms of kind, type, quality and amount
The transferror may transfer a lesser amount of debt owed to the transferee, to be settle from a larger amount owed by the transferor, on condition that the transferee be entitled to the equivalent amount of his debt
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LEGAL CONSEQUENCES
Transferee is entitled to claim the amount of the debt assigned to him through hiwalah from the payer
In restricted hiwalah, the transferor is no longer entitled to reclaim from the payer an amount transferred to the payer in respect of the debt to be settled
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If there is a condition that the payer must be solvent, the transferee will have the right of recourse if the payer is not solvent
TERMINATION
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The contracting parties mutually agree to terminate the contract. The transferee is entitled to claim the debt from the transferor
LEGALITY
There is a consensus among Muslim scholars on its legitimacy
[Ibn Qudamah, 1968, 4:394]
Deliquency of rich debtors is a form of transgression,so if one of you has his debt transferred to a rich person, let him accept the transfer of debt
[Muslim, hadith no 1564]
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