It is permissible for the debt to be waived for the person who is insolvent, and his debt can be considered as zakat if the Muslim intended that. Allah SWA says: “If it is difficult for someone to repay a debt, postpone it until a time of ease. And if you waive it as an act of charity, it will be better for you, if only you knew”.
Considering an unpaid debt as zakah
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