Chapter on Ḥawālah (Transfer of Debt)

Introduction

A ḥawālah—pronounced with either fatḥah or kasrah on the ḥā—is derived from taḥawwul (change, relocation). In essence, it transfers a claim from the liability of the transferor to the liability of the person to whom it is referred.

Its legitimacy is proven by the Sunnah, as in the hadith that opens this chapter, by the consensus of the scholars, and by sound analogy, for human need clearly calls for it.

Ibn al-Qayyim remarked, “The principles of the Sacred Law require that it be permissible, for it accords with analogy.”

Some jurists have said that ḥawālah amounts to selling one debt for another, in which case delaying possession would be allowed only as an exception—contrary to analogy. The correct position, however, is that it is not a sale of debt for debt at all; it is simply a means of discharging an obligation. For that reason the Prophet ﷺ commanded it in the context of repayment and the settlement of debts.

Its benefit lies in facilitating dealings among people—especially when the creditor is in one locality and the person upon whom the debt is shifted is in another—so that the transferee can obtain payment with ease. If a debtor refers his creditor to someone who owes him nothing, this is merely a power of attorney to borrow and is not a ḥawālah, so its rulings do not apply. The same holds if a person without a debt refers another to someone who does owe him; this, too, is only a power of attorney to collect from the debtor, not a ḥawālah.

• Bank transfers:
  Merchants in more recent centuries have used various means to move their money from one city to