Praise be to Allah.
It is permissible to give zakaah to debtors who are in financial difficulty, whether they are prisoners or otherwise, because Allah, may He be exalted, says (interpretation of the meaning):
“Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler - an obligation [imposed] by Allah . And Allah is Knowing and Wise”
If the one who is in debt is in financial difficulty and cannot afford to pay off his debt, then he may be given zakaah funds with which to pay off his debt, even if he got into debt for haraam purposes, so long as he has repented.
It says in Sharh Muntaha al-Iraadaat (1/457): If a person got into debt for his own sake, for something permissible, or he got into debt for something haraam but has repented from it, and he is in financial difficulty and cannot afford to pay off the debt, [he may be given zakaah], because Allah says (interpretation of the meaning): “…and for those in debt…” [at-Tawbah 9:60]. End quote.
It says in Fataawa al-Lajnah ad-Daa’imah (9/445): Is it permissible to give some zakaah to charitable organizations, such as those which help prisoners?
Answer: With regard to funds to spent on good causes, if it is known that the people in charge will spend what they receive of zakaah donations on the categories of people mentioned in Islamic teachings, or on some of them, such as the poor and needy, and they are honest, trustworthy, religiously committed and righteous, to the extent that one feels at ease with them and trusts them, then there is nothing wrong with giving them zakaah to spend on the prescribed categories whom they know.
With regard to the prisoner, Allah has described those who are entitled to receive zakaah in the verse in which He, may He be exalted, says (interpretation of the meaning): “Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler” [at-Tawbah 9:60]. He has mentioned “those in debt” as one of the categories who are entitled to receive zakaah.
Those who are in debt are of two types: those who have incurred debt in an attempt to bring about reconciliation between people, so as to bring an end to turmoil and conflict that has occurred among people, because of which he has made financial commitments for example, that he has committed to pay with the intention of recouping it from zakaah. This category of debtors should be given funds from zakaah to pay off their debts, even if they are rich.
The second type is one who incurred debt to improve himself and his situation in permissible ways, such as one who borrows money to cover his own expenses and those on whom he is obliged to spend, or has incurred financial obligations that are not due to injustice or transgression. He may be given zakaah with which to pay off his debts.
And Allah is the source of strength; May Allah send blessings and peace upon our Prophet Muhammad and his family and companions.
Permanent Committee for Academic Research and Ifta’.
Member, member, vice-president of committee, president
‘Abdullah ibn Munayyi‘, ‘Abdullah ibn Ghadyaan, ‘Abd ar-Razzaaq ‘Afeefi, Ibraaheem ibn Muhammad Aal ash-Shaykh.
And Allah knows best.