When Lunar New Year rolls around, so does the customary Chinese practice of paying off one’s debts. In part, this reflects a traditional symbolic wish to “close the books” at the end of the year and start life afresh on another, hopefully more fortunate, page of the celestial ledger. But what happens when personal debts have mounted beyond the capacity to pay? Drastic remedial action will follow and – as with everything else in Chinese life – symbolism, both subtle and dramatic, comes into play.

Probably the most graphic warning to defaulting debtors is red paint splashed on doorways. Symbolism alone – the messy spilling of figurative blood as harbinger of dire personal retribution – is enough to frighten most into urgent resolution of the matter.

Family members are usually prevailed upon – in one way or another – to settle the debts of kinsmen who default on their obligations

This tactic, usually a resort of loan sharks and their enforcers, has retreated in Hong Kong in recent years due to a proliferation of security cameras. In the past, however, determining just who had splashed red paint in the dead of night was difficult, especially in a Chinese society where the survival morality of the three wise monkeys – see, hear and say nothing – offered a compelling role model.

Same-native-place and clan associations were common features of the overseas Chinese diaspora, with branches representing specific districts found in Chinatowns across the world. Collective responsibility was a means of debt management and these groups helped ensure that the accounts of migrants were settled in full. The ability to exert moral, financial and other forms of pressure on family members back in the ancestral home made it difficult for defaulters to return there later and still have “face” to show. This remains the case today, and family members are usually prevailed upon – in one way or another – to settle the debts of kinsmen who default on their obligations.

Pay up or we flood your flat – Hong Kong crime gangs use new tactic to collect debts

Debt collection in Hong Kong has routinely been outsourced to shadowy organisations, of which the territory’s major banks have historically availed themselves. These “debt collection agencies” allow otherwise respectable financial institutions to recover money while keeping their hands clean by outsourcing the dirty work through several layers of carefully separated intermediaries.

Nearly 30 years ago, when I was living in Kam Tin, a mysterious conflagration took place in the local market on Lunar New Year’s Eve. One of the affected stalls was a Chinese meat-roasting shop; decades of accumulated filth and pig fat deeply impregnated into the walls, ceilings and fittings acted as a powerful accelerant to the blaze.

The inferno took some hours and a couple of fire engines to extinguish and, as far as I am aware, the physical cause was never determined.

But everyone knew why it had happened; as I later heard muttered around the village, certain bills had long passed their due date, repeated warnings had gone unheeded, and the local powers that be decided a stern lesson was required. One of the affected businesses – widely rumoured to be the defaulting party – never reopened; when the blackened remains finally stopped smouldering, its erstwhile owners were not seen around Kam Tin again.

Observing how this situation played out afforded me a potent life lesson about how Hong Kong – or this particular corner of it, at least – actually worked.