Fate of One Unable to Repay Debt
Question

                In the book al-Tawwabeen it says that a young man and his wife repented and he said to al-Sirri: I owe money. Al-Sirri said: On the Day of Resurrection the penitent and his opponents will be brought and it will be said to them: Let him off, for Allah will compensate you. 
My question is: 

If a person repents sincerely and wants to restore people’s rights, whether that is money or anything else, but he cannot do so for some reason or another, will Allah restore them on his behalf and never punish him in the grave or in the Hereafter?
Praise be to Allah.
    Repentance means turning back 
    to Allah and turning from disobedience to obedience, and restoring people’s 
    rights. We have to understand that repentance is obligatory for every Muslim 
    as Allah says (interpretation of the meaning): 

    “O you who believe! Turn to 
    Allah with sincere repentance.”

    [66:8] 

    Allah rejoices over the 
    repentance of the penitent even though He has no need of their obedience. He 
    tells us that He loves the penitent, as He says (interpretation of the 
    meaning): 

    “Truly, Allah loves those who 
    turn unto Him in repentance and loves those who purify themselves.”

    [2:222] 

    The one who transgresses 
    against people transgresses against either their material rights or their 
    intangible rights. In either case he is transgressing against the rulings of 
    sharee’ah (Islamic law). 

    Based on this, he needs to 
    repent sincerely concerning that which is between him and his Lord, and he 
    needs to restore people’s rights. With regard to intangible rights, the way 
    to do it – besides repenting sincerely – is to pray for forgiveness for them 
    and make du’a (supplicate) for them, if they did not know that he had 
    wronged them. But if he backbit about them, and they got to hear about it, 
    then he must also apologize to them and ask them to forgive him. 

    With regard to material rights, 
    repentance between him and his Lord is not sufficient, and making du’a 
    (supplicating) for the person is also not sufficient. Rather he must restore 
    these material rights and return things to their owners. If they are not 
    there then he must return it to their heirs.  

    If he is unable to return it 
    because he does not know who the owner is, then he should give it in charity 
    on his behalf. If he is unable to do this because he is poor, then there is 
    the hope that if his repentance is sincere, then Allah will pay it off on 
    his behalf so that the owner will be pleased with that, and there is the 
    hope, insha Allah, that Allah will not punish him in the grave or in the 
    Hereafter. 

    But if he does not repent, then 
    Allah will restore the person’s rights from the hasanat (good deeds) of the 
    transgressor; if his hasanat are all used up then some of the sayyiat (bad 
    deeds) of the one who was wronged will be taken and added to the burden of 
    the transgressor. This is true bankruptcy, in addition to the punishment 
    that Allah will inflict on him because of his transgression against 
    sharee’ah (sacred law). 

    It says in Rawdat al-Talibeen:

    If there is any financial right 
    that is connected to the sin, such as withholding zakah (poor-due), seizing 
    by force or crimes against people’s wealth, then in addition to this – i.e., 
    repentance – he must also discharge the duty of paying zakah or returning 
    people’s wealth if it is still there, or by giving something of equal value 
    if it is no longer there, or he may ask the one to whom it rightfully 
    belongs to let him off. 

    If the one who was transgressed 
    against was not aware of it, he should be told and the transgressor should 
    ensure that what is rightfully his reaches him. If he has died then he 
    should give it to his heir. If he has no heir and nothing is known of him 
    then he should give it to the qadhi (jusdge) whose conduct is good and who 
    is known for his religious commitment. If this is not possible then he 
    should give it in charity on his behalf to the poor, with the intention of 
    compensating him if he finds him. 

    If he is in financial 
    difficulty, then we think that he should form the intention to pay it back 
    when he can afford it. If he dies before he is able to afford it, then we 
    hope that he will be forgiven by Allah’s grace. 

    Al-Nawawi said: I say: The 
    apparent meaning of the Sunnah (prophetic teachings) is that wrongdoing is 
    still attached to him until he pays it back, even if he dies when he is in 
    financial difficulty and is unable to pay it back, if he persisted in not 
    intending to pay it back. 

    But if he had taken a loan in a 
    permissible manner, but he remained unable to pay it off until he died, or 
    he destroyed something by mistake and was unable to pay compensation for it 
    until he died, then it seems that in this case he will not be required to 
    pay for it in the Hereafter, because he did not commit a sin, and we hope 
    that Allah will compensate the owner. 

    With regard to backbiting, if 
    news of it does not reach the victim, then I have read in the fatwas of al-Hinati 
    that it is sufficient for him to regret it and pray for forgiveness. If news 
    of it did reach him, then the proper way is to contact the victim and ask 
    him to forgive him. If he is not able to do this because he has died or he 
    is away, then he should pray for forgiveness for him. There is no point in 
    seeking forgiveness from the heirs. This is the view of al-Hinati. End 
    quote. 

    And Allah knows best.