- took out $24,000 in student loan 11 years ago in Quebec

- moved to Ontario a year after graduation

- started making payments a few years later, but then stopped shortly after (lost job). This was just over 6 years ago. 

- heard nothing about this for years

- a few months ago I started getting calls from collection agency IQOR. The agent told me my new amount with interest is over $33 K. He said that I MUST pay at least $10 K lump sum + $500 per month. I told him 'that's not possible - I don't have money for a lump sum. Sorry - no dice..'. I also told him to please send me something in writing (though didn't offer my current address at that time) so that i could consider the matter.

- spoke with agent another 4 or 5 times and got a different 'deadline for recommending legal action' each time.

- collection agent contacted my parents and told them that I was going to have 'legal action taken' against me unless I - or they - paid the money (stressing my my mom - at was the agents intent). In fact my mom revealed to me that the agency had actually been contacting her / my dad prior to this recent round.

So then a couple of weeks ago the agent called again and went through the same routine. 

I then told him that contacting my parents multiple times and telling them that legal action would be taken against me was in violation of the law. He got angry at this and basically said that he was going to go ahead and recommend legal action against me to the Quebec Ministry of Education - unless I now paid all $33 K at once. I told him that was impossible and he basically cut off the call.

I then got my credit report from Equifax and it did not show my student loan. I suspect that the reason IQOR was recently chasing me was that the loan was about to be wiped from my record (which it seems to have been - is 6 years the limit?).

Today I got a notice from IQOR (the first mail i have actually received form them) stating that I have 5 days to pay $33 K or "we will be compelled to consider recommending to MIN.DES FINANCE/EDUCATION that they proceed with immediate litigation on the above account"

Questions:

- can the 'MIN.DES FINANCE/EDUCATION' (as IQOR referred to it) take legal action still (after no longer on my credit report)?

- if yes, what can they do? I have $15 K in total mutual funds (RRSP) and I work as a contractor so i have about $12 K put aside just to pay my taxes for this year. Can they take all of this?

- if answer to above questions are 'yes and yes', should I start making monthly payments even if they insist on $10 K upfront (or as is now the case - $33K) which i wont be able to pay? Do they have to settle with me if I am suggesting some sort of reasonable payment plan? 

I don't make a ton of money and I have a wife that doesn't work and a small child. If pushed i can maybe make $500 / month payment - but it will hurt. I also understand that for things like buying a house, the 6 year limit does not apply (they can check further back) and so i am not against dealing with the money owed - I just don't want to screw myself and be penalized by offering / starting payments (will the whole thin go back on my credit report if I do?).

 

What should I do?