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Fatwa: Forgiving debt and Zakat possibility
The Secretary of the Dar al-Ifta in Egypt, Sheikh Mahmoud Shalaby, stated that forgiving a debt for someone unable to pay is permissible Islamically and aims to facilitate and alleviate hardship for those in need. He clarified that such an act is considered lawful when the debtor is poor or insolvent, and it is necessary to clearly inform them of the debt forgiveness to avoid any confusion. Additionally, the debt can be counted as charity (Zakat) if there is the correct intention and adherence to Islamic shariah rules. He also confirmed that this procedure is free of legal or religious issues if the conditions are met, and its purpose is to ease the burden on those in need and assist those who are unable to repay.
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