Is Zakat Obligatory on Debts That Are Not Expected to Be Repaid?
Shafi'i Fiqh
Answered by Shaykh Dr. Muhammad Abu Bakr Badhib
Question
Is zakat obligatory on debts that are not expected to be repaid?
Answer
In the name of Allah, and all praise is due to Allah, and blessings and peace be upon our master Muhammad, the Messenger of Allah, his Family, his Companions, and those who follow him.
Zakat on debts is an established matter for both the creditor and the debtor. Imam Shafi‘i discussed it in his works “al-Umm” and Imam Muzani in “Mukhtasar al-Muzani”.
Mawardi explains in “al-Hawi al-Kabir”:
“Know that this issue includes two parts that must be addressed before ruling on the main issue. The first part is the obligation of zakat on debts, which is of two types: immediate and deferred.
The immediate debt has four categories, one of which is when the debt is owed by someone financially capable and acknowledging it, allowing the creditor to collect it whenever he wishes. In this case, zakat is due whether the debt is collected or not, similar to a deposit.”
Debts Not Expected to Be Repaid
If a person’s debt is owed by someone who is insolvent or a procrastinator, zakat is not due on that debt because it is effectively as if it does not exist. However, if the procrastinator eventually repays the debt, zakat should be paid for the number of years the debt was delayed.
“Debts not expected to be repaid, such as those owed by an insolvent person, a denier of the debt, or a procrastinator, are subject to differing opinions. According to the Hanafi school, and also the views of Qatada, Ishaq, Abu Thawr, a narration from Ahmad, and one opinion from Shafi‘i, zakat is not obligatory on such debts due to the lack of full ownership, as the creditor cannot benefit from them. The second opinion, held by Thawri, Abu ‘Ubayd, a narration from Ahmad, and the more correct opinion of Shafi‘i, is that zakat becomes obligatory when the debt is collected, for the years that passed.” [al-Mawsu‘a al-Fiqhiyya al-Kuwaytiyya]
Conclusion
Zakat is not required on debts that are not expected to be repaid, such as those owed by an insolvent person or a procrastinator. However, if the debt is eventually repaid, zakat must be paid for the missed years.
And Allah knows best.
[Shaykh] Dr. Muhammad Abu Bakr Badhib
Shaykh Dr. Muhammad Abu Bakr Badhib is a prominent Islamic scholar from Yemen. He was born in Shibam, Hadhramaut, in 1976. He received his degree in Shari‘a from Al-Ahqaf University, a master’s degree from the Islamic University of Beirut, and a PhD in Usul al-Din from Aligarh Muslim University (AMU).
He studied under great scholars such as Shaykh al-Habib Ahmad Mashhur al-Haddad, Shaykh Fadl Ba‘ fadl, Habib Salim al-Shatiri, Habib Ali Mashhur bin Hafeez, and others. He has served as the Director of Publications at Dar al-Fiqh, the former Deputy Director of Cultural Relations at Al-Ahqaf University, a former Assistant for Employee Affairs at Atiyah Iron Company, a researcher at the Sunna Center affiliated with the Dallah al-Baraka Foundation, and a researcher at Al-Furqan Foundation’s Makka al-Mukarrama and Madina al-Munawwara Encyclopedia branch.
Currently, he is a researcher at Al-Furqan Foundation’s Makka al-Mukarrama and Madina al-Munawwara Encyclopedia branch, teaches traditionally through the Ijaza system at Dar al-Fuqaha in Turkey, supervises the Arabic department at Nur al-Huda International Institute (SeekersGuidance), and is a member of the Board of Trustees of the Manuscript House in Istanbul.
His works include “The Efforts of Hadhramaut Jurists in Serving the Shafi‘i School,” “Contributions of Hadhramaut Scholars in Spreading Islam and its Sciences in India,” “Hada’iq al-Na‘im in Shafi‘i Fiqh,” in addition to verifying several books in Fiqh, history, the art of biographies, and Asanid (chains of narration).