What is the ruling regarding a merchant who went bankrupt and whose properties and goods were sold to settle his debts, but at a low price that did not cover the debts, knowing that he had been making payments and that his assets would have covered the debt if sold at a fair price? Is he obligated to pay the remaining debts, and what is the legal ruling on the division among creditors (qismat al-ghurama')? What must he do to clear his conscience before Allah?

If a debtor owes debts that his wealth cannot cover, the creditors may refer his case to the ruler, so that the ruler may place an interdiction on him and sell what exceeds his needs at a fair price. The proceeds are then distributed among them according to their shares, except for anyone who finds his exact merchandise, for he has a greater right to it, as the Prophet, peace and blessings be upon him, did with the debt of Mu'adh ibn Jabal. What remains of the debt owed by the debtor does not fall away, and the creditors must grant him respite until Allah makes it easy for him. It is preferable for them to give him charity and waive the debt.