Then & Now | Why you should pay your debts before Chinese New Year – and what will happen if you don’t

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.

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.