What is the ruling on settling a deferred debt upon the death of the creditor and before its maturity date? A man borrowed an amount of money from another person and they agreed that he would repay the full amount after three months. However, the creditor passed away one month later, and his heirs demand the immediate settlement of the debt, considering it to have become their rightful property. Do they have the right to demand early settlement of the debt prior to its agreed-upon maturity date?

The debtor is obligated to repay a deferred debt at its maturity date, not upon the creditor’s death. Accordingly, the heirs of the deceased creditor do not have the right to compel the debtor to settle the debt before the agreed-upon due date. However, if the debtor is financially capable and wishes to settle the debt before its due date, it is permissible for him to do so according to Islamic law. This would be considered a gesture of goodwill and gratitude, repaying kindness with kindness and responding to benevolence with generosity and honor.

The virtue of lending to those in need

Lending to those in need out of compassion and kindness — without seeking any personal benefit — entails a great reward from Allah Almighty Who says, "Who is it that will lend to Allah a goodly loan so that He may multiply it for him and grant him a generous reward?"
(Quran, 57:11). It is incumbent upon the debtor to repay the debt in the best possible manner, as it is not befitting to repay the lender’s kindness with nothing but equal kindness. Allah Almighty says, "Is there any reward for good other than good"
(Quran, 55:60). Moreover, Abu Huraira (may Allah be pleased with him) narrated that the Prophet (peace and blessings be upon him) said,
"The best among you are those who are best in repaying their debts"
(Bukhari).

Paying a deferred debt upon the creditor’s death before its maturity date

It is established in Islamic law that when a person dies while having outstanding debts owed to him, those debts transfer to his heirs. This principle is affirmed in Al-Hawi Al-Kabir by Imam Abu al-Hasan al-Mawardi (3:172). If the debt that has become the rightful property of the creditor’s heirs was originally set to be paid at a specified future date, then — by the consensus of scholars — should not be repaid to the heirs before the agreed-upon date by the creditor and debtor. Imam Ibn al-Mundhir observed in Al-Ijma’ (p. 112), "They [scholars] unanimously agree that deferred debts owed to a deceased person do not become due upon their death, but remain payable at their original due dates." Likewise, in Al-Ishraf (6:232), Ibn al-Mundhir states, "All scholars from whom we acquired knowledge unanimously agree that debts owed to a deceased person remain deferred and do not become due upon their death."

Therefore, if the debtor chooses to settle the debt before its maturity date and is financially able to do so, they will earn a great reward from Allah and will embody the graciousness prescribed by Islamic law regarding the repayment of debts. Abu Huraira (may Allah be pleased with him) reported that the Messenger of Allah (peace and blessings be upon him) said,
"Allah loves a servant who is gracious when he sells, gracious he buys, generous when repays pays a debt, and gracious when asking for repayment" (recorded by Malik in Al-Muwatta’ and al-Bayhaqi in Shu‘ab Al-Iman; the wording is attributed to al-Bayhaqi). Imam Al-Zurqani, in his Sharh ‘ala Al-Muwatta’ (2:512) stated,
"Being gracious when repaying a debt means ‘discharging obligations with sincere willingness, in the best manner possible, and doing so without delay."

The ruling

Based on the above, the debtor is obliged to repay the deferred debt at its due date, not upon the creditor’s death. Therefore, the heirs of the deceased creditor do not have the right to demand early repayment before the agreed-upon due date. Nonetheless, if the debtor is financially capable and chooses to repay before the due date, this is permissible in Islamic law; it constitutes reciprocating kindness with kindness, and favor with munificence and respect.

And Allah the Almighty knows best.