Helpers unpaid loan - what will happen

Hi all, very complicated situation and wondered if anyone can assist.


My helper has a large outstanding loan with an 'official' loan shark company (long story, but she took it out for a friend, friend disappeared and did not pay, company came after my helper last year who had no idea the friend had not repaid)


When she found out about the loan, she tried to pay it but was under increasing pressure from them to pay more and more. she managed 5,000 over 2 months by not sending money home.


she eventualy told me and I went to the company with her and offered to repay the principle (12k).


They said no. I then asked to see the full contract she signed (she has a single page of pretty rudimentary terms in bad English) all the documentation relating to the loan, translations of the contract in chinese if under local law, the information that was supplied to her on the application of penalties and interest etc. I was pretty angry (pregnant and hormonal!) but didnt overstep any lines.


The company rep was very agressive with me in English and ultimately simply refused to speak to me (they did keep speaking to her in Philippino). Also refused to give us any documentation.


I sent them (faxed, emailed, posted) written confirmation from her that I was able to act on her behalf, request information and discuss payment terms. They refuse to recognise this and say they will only speak to her.


At all times I have made it clear we (her and I) want to discuss a reasonble method of repayment (they suggested to her if she could pay $30k in less than a month, they would cancel the loan - of course impossible unless she took out another loan!)


They did not answer, would not return my calls, emails, faxes or posted letters. Thein HK y were harrassing her family who live here so I sent a strongly worded fax/email and letter saying I would involve the police if it continued (it stopped).


Periodically I send emails asking if we can discuss payment terms - never get anything back.


About 3 months ago they turned up in the reception of my building. My helper and I went down and I asked why they had not responded to my communications. They ignored me and asked my helper how she was going to pay. I asked them to contact me to arrange an appoint to see us both, but not to come back to my buildling again without an invitation. They were aggressive, but stopped short of inappropriate beviour, and left.


Nothing heard since, I'm now unsure what to do. We remain open to paying the principle for her, or to help her repay a resonable amount per month, taking into account her wage.


I'm guessing a court might declare her bankrupt, if so they would get nothing right? I wonder if it would effect her immigration status. She has been in HK for 12 years or so, a solid work record and has no black marks in any other way.


Not sure why they are not open to getting some money back. My husband thinks the loan rep (a local guy) was not very happy that I challenged him in our initial meeting and is now taking this quite personally.


Should I just keep sending letters so it's all documented if we go to court? I have a massive file already with all fax receipts, emails and registered mail receipts. Tried to contact the HK Money Lenders Ordinance people but got no response.


I would like to sort this out as it is hanging over her head. She has worked for us for 4 years and is a good person in an unfortunate position because she made one silly mistake and lent to the wrong person.


She would like to pay it off and move on, but if it didn't effect her immigration status, I'd almost rather spend the money on a lawyer and go to court. The contract she signed looks like a complete joke (to a layman), this company prey on people and really wind me up.


Long winded post - advice greatly appreciated!

Forgot to add, initial principle was $12,000 and over 8 years has accrued to $65,000. They seem to have capped interest at the point they found her as all dicussions to date still seem to be about the $65,000.

as long as you side with your helper, the guys know that she will pay some money back. hence they have no interest to settle for anything less than what is owed.


i don't really understand why you get in between this, because even if you win a court case, you would still have the sharks coming harassing you, your family, your kids at your school, etc.


my suggested approach is to tell your helper to get it sorted by giving her 12k (or 20k) and then tell her if it's not sorted by x date, you lay her off.


in that way, the lender can settle for 12k (or whatever she can pay) or get nothing as she would go home and could not pay anything

just to add one thing: just because you might pay off the 65k doesn't mean that the hassling and pestering will stop. contrary, they might step it up as they will see that more money can be brought home

This looks very ugly. I would seriously consider firing the helper -regardless of whose fault it is. Are you sure she signed for a friend? People from SE Asia often say things you want to hear so as to avoid conflict. The result is an even bigger mess. You may want to seek some legal advice and/or get the police involved.

What a nightmare!


I think the OP is a great lady for intervening and assisting her helper with this terrible mess.


The loan sharks will not take this matter to court - they would lose as they have no basis for charging a helper a such a ridiculous interest rate (no prospect to pay it back)


Why not spend an extra thousand dollars or so and speak to a local lawyer. Get them to write a letter on you behalf & phone call to telling them principle amount is what we are willing to pay forget the 65K. And if they harass you again we're filing a police report.


Best of luck.

Thanks everyone for all your advice - all great information on next steps.


I defintely don't want to lay my helper off - she's part of the family and a real gem (aside from this 'little' issue ... ha ha!)

You're a sweet person to help. I hope you have a copy of the contract.

Are you sure she took the loan out for a friend?

Perhaps she took the loan out herself and then resorted to telling you when things eventually went bad. The contract itself suggests a pretty mickey mouse approach.

I note you were pregnant and hormonal; a good time to prey on the boss' sympathies.

Most finance companies will sell on a bad debt to collection agencies as this keeps them clear of any actions taken by the agents. The willingness to accept $30k would suggest that is near to what they paid to take the debt. The interest charges may seem high to you but the maximum allowable is 60% a.p.r. I'm too lazy to punch the numbers through a calculator but the total amount seems still within the maximum. In any case the final amount now includes default penalties etc.

There may be no law against 'harassment' but there is one against Criminal Intimidation - basically using illegal means to force someone to do something that they are not legally obliged to do. If you feel that is the case then report to the police; both the police and courts are strong on action against 'nasty' debt collectors and their tactics. Should they appear aggressive to a pregnant or new mother you may even feel your safety is threatened by them - a case of 'Assault'

Your helper may be a gem but she seems rather flawed if she will take out a loan for a friend and then not ensure the friend pays her every month before the due date. Is she the dependable person you need to look after your baby?

You have no obligation to either pay or help in this case, and you are a sweet person to help, but I suggest you take two steps back and view the whole thing objectively from start to finish.

Firstly understand the legal side and the not so legal side. There are 2 sides to this type of episode. Many years ago Standard Chartered bank hired a debt collector to collect an unpaid credit card bill from an expat family in Discovery bay. It became headline news in HK as they got the wrong family and the debt collectors were using local methods like leaving dead chickens outside their main door. The bank distanced it self saying they had subcontracted the debt to a local company and did not know what methods it used. The Govt intervened and new rules were formed. That was also the time the privacy ordinance got enforced. Debt colelctors were NOT ALLOWED TO HAVE any physical contact with a debtor and any form of physical intimidation was made illegal. SO technically their visiting your building for the purpose of collecting a debt can and should be reported the the police. At the same time BAnks were allowed to share credit data to protect themselves. This was when agencies like TRANSUNION became more visible and active. SO your past 7 year credit account is floating in cyberspace and accessible to banks if you want credit. In the old days banks did not share such information so they resorted to heavy handed tactics for recovery.


Coming to your problem in terms of numbers. assuming she or her friend borrowed HKD 12000. Its possible she is not lying and she just signed up as a guarantoor in which case she becomes liable. For an UNSECURED loan 3% per month interest is quite normal and allowed even for pawn shops (credit cards charge about 25% per/yr anyway) . you simply multiply 12000 by 1.36 for year 1 and keep on doing that for the 8 years the loan has been outstanding. The amount may well exceed 100000. So in terms of legal limits the loanshark may well be in their legal limits in terms of amount claimed. The problem is enforcement. The only legal way forward for them is to go through courts and get a judgement and then get it enforced. I do not think your helper will have immigration troubles if she is declared bankrupt as its not a criminal offence to file for bankruptcy. Perhaps the Asiaxpat Domestic Helper agency can assist you in clarifying the immigration aspect.


At the end of the day you need to weight the pros and cons . Your helper may have been living as a family member for 8 years. Whether she got into this mess due to ignorance or stupidity is something for you to establish. Is it worth you getting too involved with loansharks that are running under triad protection rackets is up to you.


30000 on an unpaid loan of 12000 for 8 yrs (if no interest was paid over this time) is not too bad. maybe you can agree on an instalment plan by deducting her salary over a period of 2 years and help her bridge the gap by paying the debt off yourself over 6 months. depends on how bad you need her.


good luck on being a good samaritan.

Hi, i read the problem, i'm a helper too, and i've been in the same situation with your helper 10 years ago. I took a loan for a friend and she only paid once and that's it, she left. I eventually got fired off from my employer, all i need by that time was just to understand me and i will sort myself out. I did not pay that loan, coz first thing i got no job and i have a family back in the philippines. I was lucky to find a job, and still here, all i can say, is that ignore them, they can not do anything to you or your helper. All they do is just keep sending those notices and harrasing you on the phone, but apart from that, they can not harm you nor send your helper to the court. These people are just good in harrasing you, but if you fight back and tell them you will involve the police, they will stop. They can not ask your helper's family to pay the loan in the philippines, for it was processed here. You can tell them the helper's gone, next time they call, it's a lie, but that would stop them. The calls may not stop immediately, but later on, they will stop.

I wish you all the luck, and i'm glad that there are still people like you, who treats their helper fairly .

Collectors could be very aggressive and mean and verbally abusive. Be thankful you did not understand that part of the conversation(s).


My co-worker somehow managed to borrow from at least 3 of these "legal" loan company plus several private lenders that charges 15%/month. When she came clean, we found our she owes about HK210,000.00 plus another 50 thousand from our boss. I was the "recipient" of many verbal abuses for sometime as they would not believe I wasn't her. This is why I know how demeaning and dirty the words these shameless collectors are . (I know too that they're just doing their job and bullying works faster )


Anyway, have you tried going to and speaking with the manager of the said loan company? Collectors earns by % so they won't settle for less.


Also, here's how we manage to stop the nasty calls-- we faxed to them a copy of the termination letter addressed to the Immigration Dept and later block all blocked calls from our phone, their tune changed 180% when they know you have their numbers.


Also , please note that these companies charges 2.25 % (some more or less)/month x duration divided by duration = monthly fee

Ridiculous - forward the details to the police and ask them to investigate - your loan shark will very quickly disappear .... and regardless - fire your maid !

May I know what happen to the helper? Is her immigration status being affected with this case?

Hi howardl
May I know how your helper settled the loan? Please reply. Thanks

What you and your helper need to do to cut the loan sharks from the middle. Call directly to the institution or the bank from where the loan was granted. (All they need is the money) Settle with them directly. If the loan sharks comes again at your door step or tries to haras you in any way simply call the police in the spot. As the loan sharks 99% got their triad records. So once police lodged the case no harm could be made on the next move.
Bank usually agreed to settle the pricipal amount. But black listed the person for the future business.
It happens to many people here including my friends. I once meet directly the loan shark and tell him that my friend will only able to pay 200$ in cash every month. If they agreed fine i can repay the 300K amount in 500 month (what so ever) if they don't agree they are free to knock the door of the small claim tribunal. Need $12000 to declare the bankruptcy and after that the bank and the loan sharks can fly kites. Its very simple and no need to worry about.

Why are you asking what happened to the helper and the loan? This was six years ago!!!

Don't you find it interesting that nothing has changed in 6 years with regard to loans and debt collection? If the laws were changed so that smaller loans were made at a fixed interest rather than only large loans which require more than one person sharing the debt load by co signing, then this problem might not be so out of control. Two sets of rules governing HK loans and domestic helper loans equals usury
Immigration does not care about loans and credit history. They can barely keep up with the regular processing and trying to keep up with girls who come here and work for a short time and leave to jump to another employer.

Borrow at your own risk and don't repay a loan you will lose a job for sure! The only way to get ride of debt collectors is to show the girl has been terminated. By law the debt collectors must leave the employer alone alone. Show them form 407 online version you submitted to Immigration.