Suppose a debt is 100,000 and the collateral's relevant value is 65,000. The asset is lost without misconduct while possessed by the pledgee.
The special pledge liability sets off 65,000 against the debt, leaving 35,000 still payable.
Calculation:
Original debt — 100,000 rupees
Collateral value — 65,000 rupees
Remaining collectible debt — 35,000 rupees
Loss of under-valued collateral does not erase the whole debt.
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Collateral value is less than the debt
Kitab al-Rahn: Pledge Formation, Possession, Liability and Eligible Collateral
Suppose a debt is 100,000 and the collateral's relevant value is 65,000. The asset is lost without misconduct while possessed by the pledgee.
The special pledge liability sets off 65,000 against the debt, leaving 35,000 still payable.
Calculation:
Original debt — 100,000 rupees
Collateral value — 65,000 rupees
Remaining collectible debt — 35,000 rupees
Loss of under-valued collateral does not erase the whole debt.