If a loan was written up between two siblings while their parents were alive with interest stipulated in the loan (they were unaware that it was Assur), with the agreement that the loan and interest will be repaid from the borrowers portion of the inheritance, now when parents were niftar but the yerusha still has not been distributed, is there any way to restructure the loan with a heter iska to allow collecting the full amount including the interest? Additionally, if only one party has a desire to do this is that possible? (The borrower is irreligious and may want no involvement or knowledge of such a thing)?
You can make a heter iska for the future, but unfortunately there is no way to restructure the loan regarding the past interest that was accrued because the ribbis was already charged and we can’t say that it was a business investment retroactively. The question though remains, what should you do now, as it is forbidden to pay the interest. There is however a solution to your situation, which is that you should tell your brother that according to Jewish law you are forbidden to pay interest, and therefore you don’t want to pay it because you don’t want to violate a torah commandment. However you are going to let him take the money, in order not to get entangled with going to court etc. This way when he takes the interest from the inheritance, you are not violating anything.
I hope this option works for you.
See Nesivos Shalom Y:D 160- at the end of seif 13, that he brings a similar idea from R’ S. Z. Auerbach and R’ Eliyashiv zt”l. Although there are those who disagree with this idea, however coupled with the fact that he is not actually giving him the ribbis, but the brother is taking it, it would be permitted according to all authorities.