Is it permissible to give as charity the money designated for repaying an Islamic bank loan, after the bank refused settlement and considered the debt non-existent, knowing that the borrower does not have the costs of litigation and is currently paying installments for three needy families?

Whoever takes a loan or has a deferred right upon him must fulfill it, for the Prophet, peace and blessings be upon him, said: "Whoever takes people's money with the intention of repaying it, Allah will repay it on his behalf, and whoever takes it with the intention of destroying it, Allah will destroy him." Debt is not expiated by martyrdom in the way of Allah unless it is repaid. It is obligatory to strive to repay the debt by all means. If the contract stipulates that all installments become due upon delay, the bank is justified in demanding the full amount. The bank's deeming the debt as irrecoverable does not mean it is waived; therefore, one must strive to collect the money and repay it to clear one's conscience.