Not paying Zakat on debts
15-11-2007 | IslamWeb
Question:
I graduated form university about 2 years ago and I have about 6o,ooo dollars in college loans I'm paying the loan monthly with interest and I also have a house Morgage which I also pay interest on. Alhamdu le Allah I make a very good living and I was able to accumolate enough wealth to pay a good amount of zakah on it but when I did the calculations for Zakah i did not bother to consider those to loans to calculate Zakah did I do the right thing Jazkum Allh Khair
Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His slave and Messenger.
If you mean that you did not pay the Zakat on the amount of debts which you have to repay, then this is permissible, as you are not obliged to pay Zakat on it because you do not possess it [due to it being forbidden money].
However, if you mean that you deducted the amount of your debts which you have to repay from the total amount of the Zakat money on which you are obliged to pay Zakat, then this issue is already discussed in Fatwa 87557, so please refer to it.
It should be noted that dealing with Riba (interest and/or usury) is one of the grave major sins, so you should repent to Allaah and stop doing this. Allaah Says (what means): {O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war [against you] from Allaah and His Messenger.}[Quran 2: 278-279]
Furthermore, Jaabir 
narrated that the Prophet said: "Allaah has cursed the one who consumes Riba (i.e. usury or interest), the one who gives it to others, the one who records it and the one who witnesses it (its transaction).” He said: "All of them are equal in sin.” [Muslim]