Assalaamu alaykum. I lent some money to a person as a debt. After some time, I forgave the debt and cancelled my right; I did this only for the sake of Allah. Now that person has money and insists that I take my money back. What should I do? Is it halal for me, or should I take it and spend it in charity?

All perfect praise be to Allah, the Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad is His slave and Messenger.

Since you cancelled the debt and forgave it, then the debtor is not liable for it anymore. If the creditor cancelled the debt, he is not entitled to demand it again, as per the legal maxim "What falls does not return".

Durar Al-Hukkaam Sharh Majallat-ul-Ahkaam, when explaining Article 51, reads, "What falls does not return; i.e. if someone renounces one of the rights which he is entitled to renounce, then that right is permanently renounced, and he cannot claim it afterwards. For example: If a person owes a debt to another and the creditor cancelled that debt but then reconsidered and regretted cancelling the debt, it is impermissible for him to claim the debt from the debtor, because the debtor's liability has been freed of that debt when the creditor cancelled it."

Accordingly, if that person wants to reward you for your favor of cancelling the debt, or for other things, then this is considered a donation/gift from him, and he is not giving back a right that he was obliged to fulfill, because he was acquitted of it and that right no longer exists. If you accept his donation/gift and benefit from it, then there is no harm on you, especially if this would please him.

Allah knows best.