Skyrim:A New Debt

Quick Walkthrough
#Be informed of your inherited debt by Mogrul.
#Pay the debt or kill Mogrul.

Detailed Walkthrough
After the completion of the quest Reluctant Steward you will be made aware of a debt that Drovas Relvi owed to a money lender by the name of Mogrul. Now that Drovas is under the protection of Neloth and out of Mogrul's reach, Mogrul expects you to make good on Drovas' debt. To help entice you to pay the debt, he will send his thugs after you until the debt is paid.

There are multiple dialogue options when discussing this with Mogrul:

thumb|right|Mogrul's Thugs want all your money! If you don't want to pay Mogrul, your only alternative is to kill him, with the risk of the Redoran Guard intervening to stop you. However, if you are observant of your surroundings while you are in Mogrul's hometown of Raven Rock you can detect Mogrul and his bodyguard Slitter approaching you to demand that you pay up if you haven't been informed of your debt yet. He will follow you out of town if you are patient and don't run too far ahead, allowing you to discreetly dispatch him without drawing the guards' ire. You can also visit Drovas and inform him of Mogrul's harassment. While he will not be willing to pay the debt on his own initiative, you can persuade him to provide you with whatever money he can to help you pay off the debt.

Notes
Before the quest Mogrul is essential and you can't kill him. However, he loses his essential status when the quest begins and you can choose to kill him to solve this problem if you prefer to handle things that way.
If you hide inside the Retching Netch and ask your follower to do the killing, you may be lucky and avoid the bounty.
Using Mora's Grasp on a possible witness helps when trying to kill Mogrul quietly.  
You can get the 250 gold from Drovas Relvi, then sneak kill Morgul when he's in the market, from the eastern cliff, using a powerful destruction spell or bow. This nets you 250 gold without having to pay Mogrul.
If you don't want to kill him nor lose the money, you can pay him and quickly pickpocket him before he has finished responding to your payment. The gold will still be in his inventory and you can steal it back. If you wait to pickpocket him until after he's done speaking, the gold will be gone.
Another way to deal with Mogrul is to sneak behind the wall surrounding the Retching Netch stairs and make sure his bodyguard blocks his gaze on you.  Take one invisibility potion, hit the bodyguard with a powerful bow/arrow/poison (must be a single strike kill). Then, immediately take another invisibility potion.  If Captain Veleth or any other Redoran Guard is near, he will come to see what happened and start a fight with Mogrul, since there is a corpse and no one else around to blame. Now, relax and watch the outcome.
Alternatively, find a good hiding spot in the marketplace, and hit Mogrul with a Frenzy spell (silent casting helps). The Redoran Guard that Mogrul claimed would take you out, would then take him out. Some of the townsfolk he had been harassing also get to join in the fray this way. Note that attempting to cast Fury will result in a message saying Mogrul is too powerful for Fury, but it will be inconsequential and he will simply stare at you if you attempt it. Using the Frenzy method can be done inside the Retching Netch, by standing on the side of the stairs opposite where he and his bodyguard sits, casting or using a potion of invisibility, then using Frenzy, and then immediately using another invisibility spell/potion. He will be killed by the guards very quickly, and since he wont be able to see you he won't attack you. Doing it inside Retching Netch rather than the marketplace also lessens the chance of collateral damage (accidentally killing NPC's that may be necessary for certain quests) as Mogrul is typically upstairs by himself with his bodyguard. This method is advantageous as you do not risk incurring a bounty.

Bugs
 
 

Quest Stages