Is zakah obligatory on the creditor if the debtor is repaying the debt in monthly installments?

The questioner : Our Shaykh, if a man lends another man, for example, five thousand dinars, on the condition that he pays him back two hundred dinars every month, is there zakah on the man who lent the money regarding this wealth?

The Shaykh : We have been asked about this repeatedly. If the creditor has not lost hope that the debtor will pay him, then he must pay the zakah.

The questioner : Will the debtor pay on time?

The Shaykh : Understand the answer. This is your question, so it is up to you to understand the answer, but it seems the issue requires detail. In the view of the scholars, a debt is of two types: one is called a living debt and the other a dead debt. This debt of five thousand that you mentioned: if the creditor hopes for the debtor's repayment—and peace be upon you and Allah's mercy—people put this in the wrong place. When he entered, what did he say? We repeat this. It reminds me of what people say: "An increase in good is good."

The questioner : An increase in good is good.

The Shaykh : An increase in good is good, but they put it in the wrong place. As for you, praise be to Allah, you have put it in its proper place. The difference is: "An increase in good is good" if it agrees with the Shari'ah, but "an increase in good is good" as an overstepping of the Shari'ah and a correction of the Shari'ah is not a path of good. So now, if one of you enters a gathering, let him greet, and if he leaves, let him greet; the first is not more deserving than the second. You just now left with a greeting and then entered now, so you applied the hadith, , but it is not the case that a man enters and some of our young brothers—I noticed this in them just now, and I do not blame them, but this is how they were directed by their elders—say "Peace be upon you" to each person sitting there, a greeting for the number of people present. This is not of this kind, because the Messenger (peace and blessings be upon him) taught the people that if one of them enters a gathering, he should say "Peace be upon you," not greet every person sitting there. This is one of the innovations of the last times.

The questioner : An increase in good is good.

The Shaykh : Yes, so a debt is of two types: living and dead. I think it is clear to you what living and dead mean. If this debtor, with whom the creditor agreed that he would pay him two hundred dinars every month, is one for whom the creditor hopes for repayment, then zakah is obligatory on him. And if he has lost hope of repayment, then this debt is in the ruling of a dead debt, so there is no zakah on him, unless Allah revives this debt for him later, in which case the first ruling applies. Is that clear?

The questioner: Yes.

The Shaykh : If Allah wills.