It is impermissible for a debtor (whether an individual, institution or government) who can afford to pay his debt back to procrastinate. Deferring the payment of a debt needlessly is a form of injustice, and whoever does it on purpose is committing a sin and will, thus, receive punishment as a transgressor. The Prophet (peace and blessings be upon him) said: “Delay (in the payment of debt) on the part of a rich man is injustice.” (Reported by Muslim)
In his book Al-Jami` li Ahkam Al-Qur’an, Imam Qurtubi states: “It is forbidden for a solvent to procrastinate in the payment of a debt if he is asked to pay it back, for this is injustice. If a solvent does so, then he gives people the chance to sever his reputation and injure his dignity. In other words, he will be known among people for his procrastination in giving rights back to their owners. Also, the imam or judge can subject him to disciplinary punishment that depends on the discretion of the imam.”
In his book Fayd al-Qadir, Al-Manawi states: “Procrastination in the payment of debt on the part of a solvent is injustice for the creditor, because in this case the debtor can afford to pay the debt back, but he needlessly postpones it. Moreover, a poor man deserves to take that money more than a rich debtor does.
Delay in the payment of debt is forbidden in case the creditor seeks his money and the debtor needlessly defers the payment. This is a kind of injustice that incurs a major sin, and if a debtor gets accustomed to delay in the payment of his debts, he becomes a deviant and transgressor. On the other hand, delaying the payment when the creditor does not ask for his money is not injustice.”
Ibn Hajar states the following in his book Fat-h al-Bari:
“This means that it is forbidden for a solvent who is capable of meeting his financial obligations to delay the payment of a debt after it is due, unlike the case of a poor man.”
In his book Mughni al-Muhtaj, Al-Khateeb Ash-Shirbini states the following:
“A solvent should pay debt back, within his capacity, once the creditor asks for it. The Prophet (peace and blessings be upon him) said: ‘Delay (in the payment of debt)
on the part of a rich man is injustice.’
The word ‘delay’ indicates that the debt is due and its owner seeks it, then the debtor delays it. Hence, if the debtor insists on procrastinating, the creditor can raise the whole issue to the imam or the ruler.”
In short, when a debt is due, the creditor can ask the debtor to pay it back. If the debtor is solvent but he delays payment of the debt, then the creditor can take the case before the ruler to restore the money back from the debtor.