Debt and zakah

Sa'ib bin Yazid (may Allah be pleased with him) said that Uthman bin Affan (may Allah be pleased with him) used to say: This is the month of your zakah. Whoever owes a debt (or the like), let him pay off his debt from it; when your wealth has become settled, then pay zakah from it.

Sayyiduna Sa'ib bin Yazid (may Allah be pleased with him) said that he heard Sayyiduna Uthman bin Affan (may Allah be pleased with him) while he was delivering a sermon on the pulpit of the Messenger of Allah (peace and blessings be upon him), saying that this is the month of your zakah. But Sa'ib did not name the month, nor did I ask him about it. He said: Sayyiduna Uthman (may Allah be pleased with him) said: Whoever among you owes a debt, let him pay off his debt; when your wealth has become free (of debt), then pay its zakah.

Ibn Abbas and Ibn Umar (may Allah be pleased with them) said, concerning a man who seeks a loan in order to spend on his fruit crop and on his family: Ibn Umar (may Allah be pleased with them both) said: He begins by paying off his loan, and he pays zakah on the remainder. Ibn Abbas (may Allah be pleased with them both) said: He pays off what he spent on the fruit, then pays zakah on the remainder.

Ibn Jurayj narrates from Abu al-Zubayr (may Allah have mercy on him), and he from Tawus (may Allah have mercy on him), that there is no zakah on him.

Isma'il bin Abd al-Malik (may Allah have mercy on him) said: I said to Ata (may Allah have mercy on him): (What about) the land that I cultivate? He said: Pay off your expenses, and pay zakah on the remainder.

Layth (may Allah have mercy on him) narrates from Tawus (may Allah have mercy on him) that zakah is not obligatory on anyone in his wealth when his debt is greater than his wealth.

Ibn al-Mubarak (may Allah have mercy on him) said: Hisham narrates the like from al-Hasan (may Allah have mercy on him).

Fudayl narrates from Ibrahim (may Allah have mercy on him) that he said: Whatever debt you owe, its zakah is upon its owner (the creditor).

Yazid bin Khusayfah (may Allah have mercy on him) asked Sulayman bin Yasar (may Allah have mercy on him) about a man who has wealth and owes a debt equal to it: is zakah due from him? He said: No zakah.

Ibn Mubarak (may Allah have mercy on him) narrates from Yunus (may Allah have mercy on him), who said: I asked al-Zuhri (may Allah have mercy on him) about a man who takes advance loans against his orchard and his crops amounting to the whole of what his land produces. He said: We do not know of anything in the Sunnah by which the crops or fruit of a man who owes a debt on them are left so that he does not pay zakah; rather, he pays zakah even though he owes his debt. But as for the man who has gold and silver on which he owes a debt, he does not pay zakah until the debt is paid off.

Talhah bin al-Nadr (may Allah have mercy on him) said: I heard Ibn Sirin (may Allah have mercy on him) say: They did not hold back fruits against debt. He said: Ibn Sirin (may Allah have mercy on him) said: But cash (gold and silver) should be held back against debt.
The Shaykh (may Allah have mercy on him) said: This is the old position of Imam al-Shafi'i (may Allah have mercy on him), in which he distinguished between manifest wealth and hidden wealth.

Mis'ar (may Allah have mercy on him) narrates from al-Hakam (may Allah have mercy on him) that Ibrahim (may Allah have mercy on him) said: He pays the zakah of his wealth even if he owes a debt equal to it. He said: I spoke to him about it, and he retracted it.

Hammad bin Abi Sulayman (may Allah have mercy on him) said: A man should pay the zakah of his wealth even if he owes a debt equal to it, because he eats from it and marries with it.
The Shaykh (may Allah have mercy on him) said: The apparent texts that have come regarding zakah being obligatory on wealth testify to the soundness of this view, and it is the new position of Imam al-Shafi'i (may Allah have mercy on him). He used to say: The hadith of Sayyiduna Uthman (may Allah be pleased with him) most likely means, and Allah knows best, that he ordered the paying off of debt before zakah became due on the wealth; and his saying "This is the month of your zakah" may mean: this is the month after whose passing your zakah becomes due, just as one says "the month of Dhu al-Hijjah", although the Hajj takes place only after some of its days have passed. Abu Sa'id (may Allah have mercy on him) informed us of this.