Is it permissible for a debtor who is in dire financial straits to ask the creditor to free him from the remaining liabilities?
If the creditor accepts the debtor's request, will the latter be free from liability on the Day of Resurrection? What is the formula the creditor can say to the debtor to free him from his liabilities?
If the debtor is wealthy and able to repay the debt, he is obliged to hasten to repay it as soon as its term is due. In this case, it is prohibited for him to postpone the repayment. In such a case, he is not allowed to ask the creditor to waive the debts because he is not needy. On the other hand, if the debtor is in dire financial straits and has nothing to repay the debt or even part of it, he is allowed (Part No. 13; Page No. 178) to ask the creditor to waive the debt or to postpone the deadline of repayment. When the creditor willingly waives it, the debtor's liability is free. The creditor can say any formula that indicates the debtor is free of liabilities. He can say: I free you from the debt's liability, I waive the debt, I pardon you, the amount you owe me is for you, or any other formulas that imply freeing the debtor from liability.
May Allah grant us success. May peace and blessings of Allah be upon our Prophet Muhammad, his family and Companions!