The institution that granted your consolidated loan may cancel any credit cards or close lines of credit you have to make sure that you don’t continue to accumulate debt. This decision is made by financial institution providing the loan.

If you suddenly lose your source of income or are simply unable to pay your consolidated loan, you may need to explore other options such as Bankruptcy or a Consumer Proposal. Speak to a Licensed Insolvency Trustee.

There may be a fee involved to open a file for your consolidation loan, in addition to regular loan payments.

The total of all your debts must be paid in full plus 5% interest, usually within a period of three years, unless all creditors consent to an alternative arrangement and the Court approves it.

Eligible debts that can be consolidated include: credit cards, consumer loans and public utilities. Ineligible debts include: mortgages, student loans, along with others.

Using the Orderly Payments of Debt approach to repay debt will lower your credit rating. It is the same credit rating you would receive if you file a Consumer Proposal (R7). However, it will not be as low as the rating given to those who file for Bankruptcy (R9). Credit reporting agencies typically keep an Orderly Payments of Debt on your credit file for three years upon completion.

The program is only available in Alberta, Nova Scotia and Prince Edward Island. It is also available in Quebec, where it is referred to as the Voluntary Deposit Law (or formerly, Lacombe Law).

If Orderly Payments of Debt doesn’t seem like a viable option for you or is not available in your province, there are other possibilities. Speak to a Licensed Insolvency Trustee for your options.

For residents of Quebec, there exists the Voluntary Deposit Law (formerly known as the Lacombe Law). You can use a portion of your earnings (as determined by law) to make monthly payments to the Courts. You’ll need to make sure you pay off 100% of your total debt with an annual interest rate of 5%. To learn more about the Voluntary Deposit Law, please contact your local courthouse.

There is a small application cost, as well as the 5% monthly interest accrued during the repayment term.