Do I Owe Zakat Money Lent to Someone Unreachable?

No, you do not need to pay Zakat on the money you lent to someone who is now unreachable unless you recover the debt.

The obligation to pay Zakat depends on the specific circumstances surrounding the loan and the borrower’s ability to repay. 

Let’s look at the different scenarios:

• If the borrower is wealthy and repays debts on time:

You are required to pay Zakat annually on the amount you lent. This is because the money is considered easily recoverable. In this case, it is viewed as part of your assets on which Zakat is due because you have the means to retrieve it.

• If the borrower is facing financial difficulty or has delayed repayment:

You don’t need to pay Zakat for the money until it is recovered. Zakat is only due when you have the money back in your possession. Once the debt is repaid, you will need to pay Zakat for the full year after the repayment.

• If the borrower is insolvent or procrastinates in repaying:

In this case, you are not obligated to pay Zakat on the loan until it is returned. If the borrower is unable or unwilling to pay back the debt, the money is still considered a liability rather than an asset. Since you haven’t received the money, you do not pay Zakat for it.

In all scenarios, Zakat is based on ownership and possession. Until you physically possess the money again, you are not required to pay Zakat on it. If you recover the loan, and it’s been a year since you had possession, then you will need to pay Zakat on it as usual. 

And Allah knows best!

Other Zakat Questions You May Have

• Am I Liable for My Spouses or Children’s Missed Zakat?
• Is Zakat al-Fitr Required for an Unborn Child?
• Does a VAT Refund Require Zakat?
• Is Zakat Obligatory for Individuals with Mental Incapacity?
• Is Zakat Required Again on Savings from the Previous Year?
• Is Zakat Required on a Child Trust Fund?