Yes, play dumb. Tell them you will pay in installments with your new salary or whatever fabrication you like. Our employee said he was going to work somewhere else...in another country.
I have clients all the time want to put crazy things in contracts but they are provisions that are unenforceable because they are against laws or policies. You can tell them this but they want them in anyway when everyone knows they can't be enforced. They think they are being clever or can scare people into doing what they want and it does work from that perspective, occasionally.
And our employee was sent letters at our office, not his home address, to make it more intimidating. Whatever. Kind of like when a little dog is yapping at you and acting like you should be scared but you ignore it.
I get that it is an unpleasant situation and you didn't want to leave like this but you aren't the one who wrote the employment contract this way...