Issue No.1974- If the debtor has not paid any mortgage and if he does not possess anything other than his house which he resides in, and the essential household effects, the creditor cannot demand the repayment of debt from him, rather, he should give him time. However, if he has mortgaged a property, the creditor may sell it and collect his dues (even if the property is one of the exempt items listed above).
Issue No.1975- It is a common practice among some people that they give a deposit to the owner of the house and take the house as a mortgage on the condition that they pay less rent, or pay no rent at all (such a house is usually referred to as a mortgaged house), this is usury and haram. The correct method is that the owner should first rent out the house to the tenant for an amount, though little, and he stipulates in the lease contract that the tenant should give him a specified amount of loan and the house will be as mortgage against it, in this case it will not be usury, and it will be halal.
Issue No.1976- If a person wishes to stand surety for the repayment of the debt of another person, he can utter the verbal formula in English or Arabic or any other language and say, for example, “I guarantee to pay the debt of Mr. so and so”, and the creditor also says, “I have accepted it” or he can do it by signing the surety agreement, or doing any other act that makes the creditor understand this matter, and he (the creditor) also accepts it.
Issue No.1977- After a person stands surety to repay a debtor’s debts, he becomes responsible for the debt, and the debtor will be free of any obligation. In case however, the guarantor has stood surety at the request of the debtor, whenever the guarantor pays the debt, he can claim it from the former debtor. There is another kind of surety in which a person gives a guaranty and says: "If the debtor does not repay your debt I shall pay it"; this kind of surety is also in order. In fact, most of the sureties that take place in banks or against loans are of this kind. (The first type of the surety is called transference of liability from one individual to another, and the second one is called addition of one obligation to another, and both of them are in order.)
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Issue No.1978- The guarantor and the creditor should both be mature and sane, and they should not be mentally incompetent nor coerced by anyone. A bankrupt creditor whom the Mujtahid has prevented from having discretion over his property because of bankruptcy, cannot have a guarantor. (That is, he cannot transfer his debt onto someone else.)
Issue No.1979- The person for whom one stands surety should be a debtor at that time. Therefore, if someone is going to take a loan from someone else, one cannot stand as a guarantor unless the loan already has been taken. However, there is no harm if one says to a person, “Employ that staff member or worker, and if he does anything wrong or commits an act of treachery, I will be responsible”, this sort of surety is also valid.
Issue No.1980- In a surety agreement, the creditor, the debtor and the commodity given as loan should be specified. In case, therefore, there are two creditors of a person and the surety willing to guarantee says, ‘I guarantee to pay the debt of one of you”, his guarantee is of no use. Similarly, if there are two debtors of a person, and the person willing to guarantee says, “I guarantee to pay you the debt of one of them”, his becoming a guarantor is void, as he has not specified which one’s debt he would pay. Similarly, if a person has to take 100 kgs of wheat and £100.00, and the surety says, “I guarantee to pay one of the two debts” and does not specify which debt, the guarantee is not in order.
Issue No.1981- If a creditor bestows the debt upon the guarantor, the guarantor cannot claim anything from the former debtor, also in case the creditor gives up a part of his debt, he cannot demand that part from the debtor.
Issue No.1982- The guarantor cannot revoke the surety bond without the consent of the creditor, however there is no harm if the guarantor or the creditor stipulates this option in the agreement it will be in order.
Issue No. 1983- If a person was capable of paying the debt of the creditor at the time he stood as a surety, the creditor cannot cancel his guarantee and demand the payment from the first debtor, even if the guarantor may have become poor afterwards. And the same rule will apply if the surety at the time of guaranteeing was not capable of paying the debt, yet the creditor agreed to his becoming the guarantor despite knowing it. However, if the surety at the time of guaranteeing was not capable of paying the debt, and the creditor was not aware of it, and he comes to know about it afterwards, he can cancel his guarantee.
Issue No.1984- If a person guarantees the payment of the debt of a person, without obtaining his permission, he (the guarantor) cannot demand anything from the debtor, but if it has been with his permission, he can demand it from him after the payment of the debt to the creditor.
