Q. A Muslim brother owes me a significant amount of money. A Muslim friend of mine is willing to pay me for the Muslim brothers debt with Zakaat money. How can this be done Islamically?
A. In principle, a creditor may accept the repayment of a loan owed to him from a third party on behalf of the debtor provided that the debtor is an eligible recipient of Zakaat and authorises the third party to do so.
Hence, in the enquired situation, if the Muslim brother (debtor) is an eligible recipient of Zakaat and he authorises your Muslim friend (third party) to repay the loan owed to you (creditor), it will be permissible for you to accept the repayment of the loan and the Zakaat will be discharged.
Allah Ta’ala Knows Best
Mufti Ismaeel Bassa