Is it permissible for the creditor to overlook the debt owed by the debtor to avoid disputes and problems, given the absence of witnesses to either transaction?

The answer is summarized as follows:

Firstly: Offsetting Debts: If one person owes a debt to another, and the other also owes a debt to him of the same kind, amount, and due date, then they offset each other, and both debts are canceled. If the debts differ in amount, the offset occurs up to the amount of the smaller debt.

Secondly: The Issue of Seizing One's Right: If one's right cannot be obtained through legitimate means such as mutual agreement or litigation, the owner of the right is permitted to take from his adversary's property an amount equivalent to his right if he seizes it. Jurists have stipulated three conditions for taking by way of seizing one's right: 1. That he does not take more than his right. 2. That he is safe from scandal and punishment. 3. That he cannot obtain his right through legal channels, due to lack of evidence or difficulty of procedures. If any of these conditions are not met, then acting on the issue of seizing one's right is not permissible.