[How to Dispose of Wrongfully-Held Property When It Is Impossible to Reach Its Owners(1)]

Answer—and Allah is the One who grants success: He must resolve firmly to render to every person his due whenever he becomes able to do so. If he comes into ease and is able to discharge what is upon him—whether by means of a messenger or personally—he must do that. If he is unable, then when he despairs of finding them, it suffices that he give the amounts in charity to the lawful recipients of maẓālim.
I have seen a statement in al-Bayān from one of the eminent imams, peace be upon them, its purport is: if a Muslim repents while he has maẓālim but is unable to discharge them due to poverty and does not know their owners, then Allah Most High will pay them on his behalf, and nothing is due from him thereafter.
I regarded this opinion with the highest approval and was greatly impressed by it,
1. because of the facilitation it provides for the path of repentance,
2. and because it accords with Allah’s saying: “Allah does not burden any soul except with what He has given it.” [At-Ṭalāq:7]. The import of this is that a poor person who has repented yet bears maẓālim which he cannot discharge due to poverty is not tasked with doing so.
If it be said: This entails the falling away of debts when one is unable to pay them.
We reply: Debts also fall away if a debtor dies before he is able to discharge them.
Moreover, this is indicated by:
1. the analogy to the repentance of the brigand: when he repents, the claims of the people whose property he took by banditry fall away;
2. the outward sense of his (May Allah bless him and his family and grant them peace) saying: “Repentance erases what came before it.”

Source: Min Thimār al-ʿIlm wa al-Ḥikmah vol.2