Is it permissible to convert a debt of $1000 into merchandise, then sell this merchandise in installments to the same debtor for $1300, knowing that the debtor had previously offered to pay the debt in installments, and this was refused?

The reality of this transaction is that the seller sold the commodity to the questioner for one thousand [instantly], then the questioner offered to buy it from him for one thousand three hundred [deferred]. This falls under the ruling of the reverse of Bay' al-'Inah (a type of sale involving resale to the original seller), and it has its ruling according to some scholars due to the apparent pretext of usury within it, as the commodity that leaves one's possession and returns to it is rendered void. Therefore, do not sell the commodity to this person and avoid this transaction.