بسم الله الرحمن الرحيم
It is mandatory to give interest amount to poor (who does not own wealth equal to nisab) without an intention of reward. Thus, in the question mentioned above, if the said person is not sahib-e-nisab then you may give him interest amount without an intention of reward whether he is debtor or not. Thereafter, the said person may spend that money on him or on his family or wherever he wishes. You may give such money without telling him so that the person does not feel shy.
لأن سبيل الكسب الخبيث التصدق إذا تعذر الرد على صاحبه . (رد المحتار، فصل في البيع 9/553، ط: زكريا)
Allah knows Best!
Darul Uloom Deoband
This answer was collected from the official ifta website of Darul Uloom Deoband in India.