Dear respected Shaykh, assalamu alaikum wa rahmatullahi wa barakatuh. How is the Zakat on debts paid? ما هي كيفية زكاة الدين؟

Praise be to Allah, and may Allah’s peace and blessings be upon the Messenger of Allah, his family and his companions. Wa alaikum assalam wa rahmatullahi wa barakatuh. As to what follows: In response to your question, we say:   The majority of the scholars have stated that if a person is owed money which he hopes will be repaid, he has to pay Zakat on it. The scholars have two opinions on the method of payment. Some scholars say that the person has to pay the Zakat on the debt when he pays the Zakah on the money that he has after the passage of a year. Other scholars are of the opinion that he should wait until he receives the money which he borrowed, then he should pay Zakat for the whole period that the money was with the debtor. Both these opinions have a rational basis. However, if the person fears that the money will not be repaid like if it is owed by an insolvent person, then Zakat is not due on this money. Some scholars are of the opinion that if the creditor is (eventually) repaid, then he should pay the Zakah for one year.