Zakat to a debtor
In the name of Allah, the most Beneficent, the most Merciful.
Allah states in the Qur’an, “The alms are only for the poor and the needy, and those who collect them, and those whose hearts are to be reconciled, and to free the captives and the debtors, and for the cause of Allah, and (for) the wayfarers; a duty imposed by Allah. Allah is knower, Wise.” (Surah Tawbah v. 60)
The condition is that the person in debt does not have enough funds to pay off that debt because the word “gharim” means a person in debt. Some scholars add the condition that this person should not have borrowed money for something impermissible. If someone goes into debt for something sinful then he should not be helped with zakat money. (Maariful Qur’an p.413 v.4)
The conclusion we can come to is that it is permissible to give zakat to someone who is in debt. It is also permissible for you to give zakat to your poor relatives and make the intention of zakat but at the time of giving it to them says that it is a loan and then later forgive the loan. This is correct and the zakat will be discharged. (Fatawa Rahimiyah p.112 v.3)
Only Allah Knows Best
Mohammed Tosir Miah
Darul Ifta Birmingham.