If one has zakat-eligible wealth and debts, he is obligated to pay zakat on the wealth

Question : The questioner says: Honorable Shaykh, I have debts and I have wealth, but the debts are more than the wealth I have, and it is trade goods. Is zakat obligatory on me? And is the debt that people owe me subject to zakat?

Answer : The correct view is that one who has zakat-eligible wealth is obligated to pay its zakat, even if he has debts. If a person has trade goods worth forty thousand and has a debt of forty thousand, he is obligated to pay the zakat. In fact, even if the debt he owes is more than the wealth in his possession, he is obligated to pay the zakat on that wealth, due to the generality of the evidence indicating the obligation of zakat on wealth. As for the debts that people owe, if they are debts that a person cannot collect, there is no zakat on them, even if they remain for many years. However, when he collects them, he pays zakat on them for one year. If the debts are owed by wealthy people from whom you can extract what is due to you, then you are obligated to pay zakat on this debt every year. Yes.