Forgiving an outstanding debt

If you don’t intend taking the money back, then you should inform him that it’s a gift from your side. By doing so, he will feel honoured and be absolved from his responsibility. It is possible that he remembers the debt but is not able to settle it immediately, hence the delay. By clarifying the matter, he will be at ease. Also, if he is unaware of you forgiving the debt, then he would pay the debt to your estate if you predecease him, hence it is best to clarify the matter.

Rib’ee Bin Hiraash narrates that Hadrat Huzaifa Radiallahu Anhu narrated to them that Rasulullah Salallahu Alaihi Wasallam is reported to have said, “The angels encountered the soul of a person who was from the previous Ummats. They said, “Do you know of any good?” He replied, “NO!” They said, “Remember!” He said, “I used to loan money to people and I would command my workers to grant respite to the needy and they be tolerant towards the wealthy. Allah Ta’ala said, “Be tolerant to him (meaning forgive him.)”