What should a person do who demands that his brother return a sum of money he lent him, while the brother denies it and claims that he has money with him, knowing that the brother is unjust and of bad character?

If you have evidence or witnesses to his borrowing the money, you can take the matter to court if he refuses to pay. Otherwise, you only have his oath. If he swears, denying it, then your right will not be lost with Allah. We advise you to forgive him to preserve brotherhood, in accordance with the Almighty's saying: "So whoever pardons and makes reconciliation - his reward is due from Allah." You are not obliged to pay his housing rent as there was no agreement to that effect.