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How to be a responsible credit card user
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Orderly Payment of Debts
Orderly Payment of Debts (“OPD”) is a debt repayment arrangement available only in the provinces of Alberta and Nova Scotia. OPD begins with an application to the Court for an Order consolidating unsecured debts into one monthly payment, with an interest rate of 5% and a payment period of up to three years. OPD is legally binding on many types of unsecured creditors, providing that they have consented to be included in the arrangement when they are owed more than $1,000.00. Certain types of debts such as income taxes or business debts are not included, however. OPD is administered by provincial credit counsellors.
A designated provincial body will file for a Consolidation Order with the provincial courts on your behalf, which will combine all of your unsecured debts into one payment. The court will determine your monthly payment and use that money to pay back your creditors directly. The total amount you will pay will be equal to the total amount of your unsecured debt, plus 5% interest.
Orderly payment of debts may be a good choice if you:
- Live in a province that issues Consolidation Orders / Voluntary Deposit Service (AB, NS, QC)
- Are able to repay your debts within three years
- Have not had any legal proceedings against you from creditors If a creditor has already taken legal action against you, a Consolidation Order may not stop creditors from seizing your assets. Speak with a Licensed Insolvency Trustee to discuss other options to manage your debt.
Voluntary Deposit Law in Quebec
Voluntary deposits are designed for debtors who reside in Quebec to make regular, monthly payments to the Court based on their income and dependents. The Court then ensures that these payments are distributed to creditors. This arrangement lasts until 100% of your debts are paid in full, along with a 5% interest per year.
The voluntary deposit protects the debtor against salary garnishments and seizure of furniture found in the residence. It does not however, protect the debtor from seizure of the home, assets and/or furniture financed by an installment sales contract, bank accounts or a vehicle.
Because of the limited protection from seizures, continued interest payments, the obligation to pay a relatively high percentage of your income and receiving an R9 credit rating, this is often not the most sought-after debt solution for Quebecers looking to make a fresh financial start.
Life-Changing Debt Solutions is about finding the best choice that will work for you. To compare all the available options, contact us for a free confidential consultation.
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