This is the first view on the issue.

The second view is that if the debt is owed by an insolvent person or by one who delays payment, then no zakah is due on it, even if it remains outstanding for twenty years. Likewise, if only one month remained before the completion of the zakah year, and he then lent the wealth to an insolvent person, no zakah is due on it. But if it is owed by a wealthy person who is willing to pay, then zakah is due on it every year.

The third view is that no zakah is due on debt at all, whether it is owed by a wealthy person or otherwise, because a debt owed by someone else is not in your possession such that it may be counted among your wealth. Thus, no zakah is due on the debt until it is received.

The fourth view is that zakah is due on it if its recovery is hoped for, such as a debt owed by a poor person, since it is possible that he may obtain the means to repay it. But if its recovery is not hoped for, such as lost, forgotten, or missing property, then no zakah is due on it.

The correct view is that zakah is due on it every year if it is owed by a wealthy person who is willing to pay, because it is deemed to be in your possession. However, he pays it when he receives the debt. If he wishes, he may pay its zakah along with the zakah on his other wealth. The first is a concession, while the second is more virtuous and more quickly discharges one’s liability.

As for a debt owed by one who delays payment or is insolvent, no zakah is due on it, even if it remains outstanding for ten years, because he is unable to recover it. However, when he receives it, he pays zakah on it once only, for the year in which he receives it; he is not required to pay zakah for the preceding years.

This view was mentioned by Shaykh al-ʿAnqarī in his marginal commentary, on the authority of Shaykh al-Islam Muhammad ibn ʿAbd al-Wahhab and his descendants (1), and it is the position of