What is the ruling on someone who was entrusted with money, and it was stolen due to his negligence, given that he is poor and cannot repay it except by selling the house he lives in with his children?

The trustee (recipient of a deposit) is trustworthy and is not liable for the deposited item unless he exceeds his authority or acts negligently, based on the Prophet’s (peace be upon him) saying: "The trustee is not liable for a guarantee."

However, if he exceeds his authority or acts negligently, he becomes liable for a guarantee because he has caused damage to another's property.

If the person in financial difficulty cannot repay, the guarantee remains a debt upon him. Pardoning him is better, as Allah Almighty says: "And if there is any debtor in difficulty, then wait until he is able to pay. But to remit it as charity is better for you, if you only knew." (Quran 2:280)