Several years ago, I lived in the UAE. I had a loan outstanding with one of their local banks. After Sept 11, I lost my job as I was working for clients in Riyadh (Saudi Arabia) and the business died down due to the uncertainty in the marketplace.

I left the UAE but continued to make my payments from my small start-up business. 18 months later, I realised that I was not going to be able to continue the payments at the same level. I contacted the bank to try to reach an agreement to lower the payment. they agreed, but indicated they would prefer to get a lower lump-sum and they would write down the balance.

A few weeks later, I stopped on a layover in the UAE to collect some outstanding debts from people who owed me money. I was also going to make a payment to the bank as agreed. I was arrested at the airport. The bank had filed a complaint against me for non payment of the loan. Spent the night in jail, and had to surrender my passport. I went to the bank and they told me I had to pay the full amount, not the agreed upon reduced amount and that I had to pay now. (felt like extortion; but legal over there)

I paid what I could drum up from relatives and what I was able to get from my own accounts. The vast majority is paid. I was given a release form to give to the police, collected my passport and left the country. That was over two years ago.

Yesterday, I get a call from a collection agency demanding the entire amount, plus interest plus fees etc.

My question is what are my rights. Do I have to deal with the collection agency. Can they damage my credit rating? Should I refuse to pay them anything. Does Canada enforce laws from another country in matters of collection. Should I let them sue me.

The amount they are claiming is 18,000. The shortfall from our original agreement is 3000. I'm not willing to be blackmailed and I don't want to reward them for acting in bad faith.

Any help or advice is greatly appreciated