My relative is building a house for himself, and I have lent him a large sum of money. He has many debts as a result of this construction, and I am aware of his financial situation, and

The questioner : My relative is building a house for himself, and I have lent him a large sum of money. He has many debts as a result of this construction, and I am aware of his financial situation. It has been nearly two years, and I have not paid zakah on that money. Is there zakah due on this? May Allah reward you with good.

The Shaykh : You are not obligated to pay zakah on this loan because he is unable to repay it. Debts are of two types: one is owed by a person who is capable of repayment; if you ask him for it, he will give it to you. In this case, zakah is obligatory on the person who holds the debt. He may either pay zakah on it along with his other wealth, or he may wait until he receives it and then pay zakah on it for the time that has passed. The second type is a debt owed by someone who is insolvent or by someone who delays payment such that you cannot demand it from him. In this case, there is no zakah on it until you receive it. When you receive it, you pay zakah for one year for the time that has passed, even if the period was long. This is the most correct opinion regarding the issue of debts.

The questioner : May Allah reward you with good.