Living in Germany + outstanding loan

My situation is as follows: I am from Germany and was a permanent resident of Canada until August 2009. I went to college and took a Quebec student loan, totalling around $1500. After college, I started working in Canada and repaying my student loan right away.

When I returned to Germany in 2009, my financial situation no longer allowed me to make payments and I used the Deferred Payment Plan (outstanding loan at that time roughly $8500). I used the DPP 3 out of 4 times, for a total of 18 months. When I received the 4th renewal notice in January 2011, I knew that I only had 6 months grace but wouldn't be able to start payments again as I was/am going to university again and am receiving a German student loan. So I wrote a letter to the student loan support services at BMO (who granted me the loan) explaining my situation (that I would be attending university for at least another 5 years while receiving a German student loan and therefore not being  able to pay back the Quebec student loan anytime soon) and asking for a possible solution (I am willing to pay everything back afterall). At the same time, I applied for the last possible DPP so that I would not have to repay before September 2011.

In March, I was contacted by BMO via e-mail, advising me that they had referred my file to AFE in Quebec and would no longer be dealing with this issue. So I wrote a similar letter to AFE, explaining my situation and asking what I could do. Instead of getting a reply to that, I received a "generic" letter at the end of May 2011 asking me to put my file in order before June 4, 2011 or else they will transfer it to a debt collection service, among other consequences. I again contacted them to explain my situation and that I'm trying to find a solution with them, but it took until December 2011 (!) before I heard back from AFE - I received a letter as a last reminder to repay my loan, but at around the same time I also received an email letting me know that they read my January letter (wow - 11 months later...).

In that email they told me that I'd not have to repay my loan when attending university, all I'd need to do is send them proof of my full-time studies each semester, the first one only within 2 weeks of that email. The problem is that my university will only issue these proofs in German and for each semester I'd need to get a certified translator to translate into English/French, which means a lot of additional costs and extra time, so that - adding the postal shipping times to Canada - I'd never be able to send in that proof on time each semester.

I now received another letter from AFE with a request to send a cheque of $150 each month to them in order to repay my loan or authorize them to use preauthorized debit repayment. By now, with the interest accrued I have to repay $9000 which I cannot afford right now.

My question now is what I should do. Communications with AFE don't seem very efficient and they don't really seem to address my issue of working out a solution for my situation. I am willing to repay my loan after all and had hoped to extend the maximum time allowed for the DPP or something along those lines. But all I get from them are requests to repay now or else they will transfer my file to a debt collection agency, which leads me to my next question: can they use a debt collection agency when I live in Germany?

Any suggestions on what I could/should do now would be greatly appreciated. Thanks and sorry for the long post...

No, they did not really provide me with an explanation why they referred my file. This was the email communication we had:

From:CPE, CPE
Sent: February 2, 2011 2:35 PM
To: xxx
Subject: 

Ms xxxx

 Please take note that we will refer your loan to the Government after the differed payment. If your situation changes please let us know.

 Thank you

 Diane Bourgault

Collection officer

My response to that (I didn't even know if this was in any way related to the letter I'd sent):

 Dear Ms Bourgault,

Thank you for your email. Was this email sent in response to my letter dated January 13, 2011? If yes, what exactly does it mean for me that you are referring my loan to the Government? What are the consequences of that, especially in regards to interest payments and the loan itself, for example?

For ease of communication, you may reply in French, if you prefer. For me, it is easier to write in English. However, I do understand written French well.

Again, thank you.

And then their answer (in French) basically just saying that I'd need to make arrangements with AFE:

Bonjour Mme xxx ,

En réponse à votre question, le fait de référer votre prêt étudiant au gouvernement signifie que la Banque de Montréal ne l’administrera plus. Les conséquences de cela sont que vous devrez dorénavant prendre des arrangements avec un agent de l’Aide financière aux études pour le remboursement de votre dette.

Vous pouvez contacter un agent du gouvernement au 1-877-643-3750 pour avoir plus d’informations concernant leurs modalités de remboursement.  

Merci et bonne journée,