Is zakat obligatory on an amount designated for future debt repayment, knowing that this money is treated as ordinary money, and is zakat obligatory on money equivalent to an unpaid debt?

He who prepares money to pay off a debt, his situation is one of two:

1. If he has money exceeding his needs (such as real estate or an extra car) that he can allocate for the debt, then zakat is obligatory on all the money prepared for the debt if it reaches the nisab by itself or by joining other money with it. The amount of the debt is not deducted from the money on which zakat is paid.

2. If he does not have money exceeding his needs, some scholars believe that there is no zakat on the money if it is equal to or less than the debt. If it is more than the debt, the amount of the debt is deducted and the remainder is subject to zakat if it reaches the nisab. Others believe that all the money is subject to zakat and that the debt does not nullify zakat. The first opinion is the one adopted for fatwas.