One of our brothers who is having some debt but possesses some property, which if sold, he can pay back the debt. So can we give him from the amount of Zakāh?
Regarding taking Zakāh money to repay the debt, the Permanent Committee has answered as following:
Q: Is it permissible to give Zakāh (obligatory charity) to a debtor? In other words, is it permissible to give Zakāh to a person who incurred debts to buy a piece of land, clothes for his children, or a car to help him fulfill his necessities?
A: A person who was obliged to make a debt to have his own house, buy adequate clothes for himself or for those who are under his care such as his parents, children, or wife, or to buy a car to use for earning his as well as his family’s livelihood and who is not able to pay back his debt is entitled to receive from Zakāh money. Conversely, if such person made the concerned debt to buy a luxurious land or car just to entertain themselves; they are not to receive from Zakāh.
And regarding taking Zakāh for repaying the debt while owning a piece of land, I have asked Shaykh Abu Bilal al-Ḥaḍramī, the summary of what he told is:
If this land is kept for building his house and he doesn’t have a house or this land is kept for building a shop from which he can earn on it his livelihood then this land is for his necessity and he can take Zakāh for repaying the debt and no need to sell the land. Otherwise he cannot take the Zakāh.
Compiled by: ʿAbd an-Nūr al-Hindī