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What is an Orderly Payment of Debts Order in Canada?
Orderly Payment of Debts also known as a Consolidation Order is a way of repaying debts spelled out in Part X of the Bankruptcy and Insolvency Act.
An Orderly Payment of Debts or Consolidation Order applies to unsecured debts. It does not apply to the following debt:
- Federal or Provincial debt;
- School district debt;
- Mortgage debt;
- Business debt;
- Wages claim in Alberta;
- Claim for mechanic’s lien in Alberta;
- Claim for a lien under the Garagemen’s Lien Act in Alberta;
- Any debt claimed by a province to NOT below in this part.
What is an Orderly Payment of Debts Order? On an application to court and if approved the debt will be paid off in full over a time not to exceed 3 years. One payment is made each month and is periodically distributed to your creditors. The payments must pay your debts in full plus 5% interest.
What is an Orderly Payment of Debts Order? The provinces that can file Orderly Payment of Debts (OPD) are Alberta, Saskatchewan, Prince Edward Island, Nova Scotia and Quebec where the program is known as the Lacombe Law. Manitoba and British Columbia had OPD programs, but have cancelled them.
Features of Orderly Payment of Debts:
- Creditors are contacted on your behalf;
- Consolidates all your unsecured debts;
- One monthly payment, based on what you can afford to pay;
- Repays your debts in full in three years or less;
- Interest rate reduced to 5%;
- Legally binding on your creditors;
- A Stay of Proceedings prevents creditor from taking legal to collect their debts and Collect calls are stopped;
- You keep your assets, such as your house and car;
- Have help from a counsellor;
- You are provided the opportunity to learn budgeting and credit skills;
- You can learn how to rebuild a good credit rating;
- If a creditor has already taken legal action against you, a Consolidation Order may not stop creditors from seizing your assets.