What is an Orderly Payment of Debts or Consolidation Order?
Orderly Payment of Debts or Consolidation Order
When your debt becomes overwhelming, you may feel as though you have run out of options.
If for some reason you are unable to qualify for a consolidation loan then you may think that your only escape route would be to file for bankruptcy.
This is not the case at all.
If you are a resident of PEI, Nova Scotia, Saskatchewan or Alberta, then you have an alternative program which gives you the chance to lower your interest rate to 5%.
The Orderly Payment of Debt also gives you the chance to pay your debts over a period of 5 years.
Can I Sign up to the OPD Program?
The OPD program is available to any resident in Nova Scotia, Alberta, PEI and Saskatchewan.
It is managed by agencies and it is intended as a way for you to pay off your debts while also giving you the chance to learn more about money management.
How does it Work?
When you look into bankruptcy or even consumer proposal, you will soon see that people who are entering the program aren’t offered a settlement option and they aren’t having a portion of their debt written off either.
The creditors instead agree to accept a lower interest rate of 5% and they also agree to a fixed payment schedule.
With this, any unsecured debts, including any tax debt can actually be included in the orderly payment of debts program.
The program is administered through the courts and once the terms have been agreed, the creditors cannot take any legal action against you.
They are also unable to harass you by mail or phone.
They instead agree to settle the debt as long as you keep up with the payment schedule that has been agreed.
After meeting with a counsellor, your agency will then contact any creditor on your behalf.
The program will allow any unsecured debt that you have to be consolidated and it will be paid off in a single monthly instalment.
The total amount that you will need to pay each month will be based on your circumstances.
Your agency will divide the payment amongst the creditors.
The largest portion will go to the biggest creditor and the smallest portion will go to the smallest creditor.
People who enter the program will be able to keep their assets, and they can also pay off the debt earlier if they want.
When they do, they won’t experience any kind of penalty.
Successful completion of the program will also involve financial education, but this can be completed online or in the form of a live seminar.
Is there a Cost for OPD?
Depending on where you live, there may be a small cost involved.
OPD programs will be administered by a not for profit agency.
They will charge a small fee every month to try and offset the cost of managing the program.
Will OPD Impact my Credit Score?
When you are enrolled in the program, this will show on your credit score.
It will show as long as you carry on making payments.
When you are making payments under the program, you will not be allowed to apply for any new kind of credit.
When your OPD has been paid in full and when it has been discharged it will appear on your report for 3 years.
You will be able to start rebuilding your credit score after this point though.
How do I Apply for ODP?
If you are a resident of Saskatchewan, Nova Scotia or even PEI then you will be able to contact a local counselling service such as Bankruptcy Canada.
When you have done this, you can then explain your situation while also determining if the option is the best solution for you.
You can then find a reasonable payment schedule and you can also get help with submitting the paperwork.
Another bonus of going through a counselling agency is that they can then provide you with ongoing support while you complete the program.
If you are struggling with debt or if you are finding it hard to deal with all of the phone calls that you are getting from your debt collection agency then OPD is a very valuable tool that you can use to clear your debt.
You can do this at a steady pace with a very good interest rate.
If you are having a hard time finding out if it is an option for you then Bankruptcy Canada can help.
Contact us today to find out more, we would be more than happy to give you the support you need.