The process that’s underway seems to be pretty much the right thing, although you could put a motion to the next general meeting that the Owners Corp stops adding penalty interest to the debt Under Section 85(2) of the Act.
It may seem harsh to get debt collectors involved but you have to protect the interests of all owners and that may mean getting a court order that when and if the family sell their flat, the owners corporation will be repaid all the money it’s owed.
This family is clearly struggling but by not bringing this to a head, your Owners Corp may just be enabling them to get into more debt. Maybe they could move into a rental in your block, sell their flat, clear their debts and start again. Would that be so bad?