If that is the only source of income he has, what can you do?
if that is not the case than you could ask him to give from some halal source, but if it is than you could either donate it as charity if you don't want to keep it unless its a large sum than hmmmmmmm
If you already know it is not from halal source,why would you accept the money in the first place?If he really can't return back your money as there is no halal source,just assume it is sedaqah to him.Money is not everything in life and when we die,we are not gonna take it with us. It is better to be hungry than allow haram money to enter your body.
If the money is in a huge amount and you need that money very badly,you should ask a scholar about this matter
ASALOLIKUM
For what i can tell u wid my limited knowledge is.....if a man takes money as "Qaraz" from some1 and he is not able to pay back now...he can use "Mushtaba" money for this purpose.....
2ndly the most pure and tayyab maal and money for someone is money that he get as MIRAAS and MAAL GINEEMAT....now u may think maybe this money ones get as MAAL GINEEMAT is not 100% pure for those who had earned/owned it but when its come to some1 as maal gineemat its pure and tayyab maal......
so things are different....u must ask this to some authtic AALIM or MUFTI.
JZK
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