A 20-year-old service industry worker says his attempt to resolve credit card debt through a debt consolidation company instead escalated into bankruptcy proceedings and high-cost borrowing, in a case that has raised concerns over the practices of some debt relief intermediaries.
The man, identified as Sam, told Sing Tao Probe, a sister publication of The Standard, that he had accumulated about HK$170,000 in debt from credit card spending and loans from multiple finance companies. Earning around HK$20,000 a month, he said his financial difficulties began after repeated overspending on travel and leisure, which later led him to borrow from both mainstream and smaller financial institutions to cover repayments.
Sam said he later approached a debt consolidation company in Tsim Sha Tsui earlier this year, hoping to restructure his obligations into a single repayment plan with lower interest. Instead, he alleged that staff at the firm persuaded him to file for bankruptcy, assuring him it would reduce his financial burden and allow him to “start again” after several years.
He claimed he was subsequently directed to obtain a loan from a finance company linked to the arrangement. Of a total loan of HK$53,000 in fees and charges, Sam said he received only HK$11,000 in cash, with HK$8,000 used for bankruptcy filing, HK$3,000 given to him as pocket money, and the remaining HK$42,000 retained as administrative fees, accounting for nearly 80 per cent of the loan amount.
After submitting a bankruptcy application at the High Court, Sam said he was informed that creditors would be notified. However, he alleged that several finance companies continued debt collection efforts and contacted his family, increasing pressure on him.
He said his family eventually stepped in to settle his outstanding debt of HK$170,000. The bankruptcy application was later withdrawn.
Sam subsequently sought a refund of the HK$42,000 administrative fee after being told that HK$35,000 would be returned. However, he said the refund was never completed.
When reporters visited the company’s listed address, it was found to be a co-working space with no staff on site. The finance company involved declined to comment on the case.
A debt adviser quoted in the report said the company may have operated without a licence, warning that such cases often leave consumers unable to recover funds once intermediaries disappear or delay repayment indefinitely.
Sam said the experience had left him with a harsh lesson in financial discipline, adding that he now intends to cut spending and avoid relying on credit to fund his lifestyle.
