Pitfalls, Failed Plans and Official Sources
Orderly Payment of Debts: the court consolidation program in Alberta, Nova Scotia, Saskatchewan and PEI
How Orderly Payment of Debts under Part X of the Bankruptcy and Insolvency Act works, which provinces offer it, which debts qualify and how it compares with a DMP or consumer proposal.
Orderly Payment of Debts (OPD) is a court-backed debt consolidation program under Part X of the Bankruptcy and Insolvency Act. You apply to the clerk of the court where you live for a consolidation order; you then make one payment to the program, which pays your creditors, and creditors covered by the order generally cannot take other action against you while you comply. OPD repays debts in full, so it is closer to a debt management plan than to a consumer proposal, but with legal force. Part X applies only in provinces that have opted in; it is generally described as available in Alberta, Nova Scotia, Saskatchewan and Prince Edward Island. In Alberta, the non-profit Money Mentors says it exclusively offers and manages the OPD program in the province.
Part of debt relief mistakes and official sources. Check the current program details with the administrator in your province. General information, not legal advice.
How OPD works
- Assessment. You meet the program administrator, who reviews your income, expenses and debts.
- Application. An application for a consolidation order is made to the clerk of the court where you reside (BIA s. 219).
- Order. Creditors are notified and have 30 days to object (BIA ss. 220–221, 224). The clerk then issues the order setting the amount and timing of payments. Any party affected can apply to the court within 15 days after the order to have it reviewed (s. 227). An order that would take longer than three years to pay off needs the creditors' consent or court approval (s. 226).
- Payments. You pay into court, or through the administrator, and the money is distributed to creditors by dividends.
- Completion. When the debts in the order are paid, the order ends.
Which debts can be included
Section 218 of the BIA sets out what Part X covers. In summary:
| Debt | Included? |
|---|---|
| Judgments and claims up to $1,000 | Yes |
| Larger claims | Only if the creditor consents |
| Debts to the federal or provincial Crown, municipalities or school districts | Excluded by the Act |
| Debts relating to public revenue or collectable as taxes | Excluded by the Act |
| Mortgage covenants and land-sale agreements | Excluded |
| Debts of a trader or merchant in the ordinary course of business | Excluded |
The Act's $1,000 threshold is old, so in practice many debts enter OPD with creditor consent, and the administrator negotiates that. Money Mentors states that its OPD program can include some government debts such as income tax and student loans; ask how this works with creditor consent before relying on it.
Interest
Part X provides that the consolidation order bears interest at the rate that applies to judgment debts, or another rate prescribed by regulation (s. 225). The federal Orderly Payment of Debts Regulations (C.R.C., c. 369) prescribe 5% a year, an application fee of $20 and a deduction of 15% by the clerk from each payment to a creditor. In Alberta, Money Mentors advertises a fixed 5% interest rate and no start-up fees. Confirm the rate and any costs with the administrator in your province.
Where it is available
Part X applies in a province only if the federal Cabinet, at the province's request, declares that it applies (BIA s. 242). Neither s. 242 nor the Regulations list the participating provinces; the Regulations still name designated courts for Saskatchewan, Nova Scotia, Prince Edward Island and some others. As commonly reported and as reflected on administrator websites:
| Province | Status | Who to contact |
|---|---|---|
| Alberta | Available | Money Mentors (non-profit) |
| Nova Scotia | Available | Provincial program administrator; check with Nova Scotia government services |
| Saskatchewan | Available | Check with the provincial administrator |
| Prince Edward Island | Available | Check with the provincial administrator |
| Other provinces and territories | Not available | Consider a DMP, consumer proposal or, in Quebec, the voluntary deposit |
Availability and administrators can change; confirm with your province before choosing.
OPD vs DMP vs consumer proposal
| Orderly Payment of Debts | Debt management plan | Consumer proposal | |
|---|---|---|---|
| Legal basis | BIA Part X court order | Voluntary | BIA Part III, Division II |
| Repay | 100% of principal | 100% of principal | An agreed portion |
| Interest | 5% a year under the Regulations (Money Mentors in Alberta: fixed 5%) | Reduced or waived if creditors agree | Stops at filing |
| Creditor protection | Covered creditors bound by the order | None | All unsecured creditors after acceptance |
| Availability | AB, NS, SK, PEI | Everywhere | Everywhere |
| Credit record | 2 years after completion, according to Money Mentors; confirm with the bureaus | 2 years after completion (FCAC) | 3 years after completion or 6 years after signing |
Illustrative example. Tom in Edmonton owes $21,000 on cards and a line of credit at an average 20%. Paying it off in four years at that rate would take about $639 a month. Under an OPD order at 5%, the rate Money Mentors advertises, his payment over four years would be about $484 a month, or about $23,214 in total; check any fees with the program. A consumer proposal of perhaps $250 a month for 60 months would cost less in total but is a formal insolvency. A DMP would be similar to OPD but without the court order. Use the DMP saving calculator to test the interest difference; enter the OPD rate you are quoted.
Who OPD suits
- Residents of a participating province.
- People with steady income who can repay all principal over a few years once interest is low.
- People facing collection or garnishment from creditors who would be bound by the order.
- People who want to avoid a consumer proposal or bankruptcy on their record.
Who it does not suit
- People who cannot repay the full principal: a consumer proposal reduces debt.
- People whose main debts are excluded, such as large tax debts, unless creditors consent.
- People outside participating provinces.
Related: OPD is run by court offices and non-profits; be wary of anyone charging to "enrol" you, as described in unlicensed debt consultants, and see what an OPD order means for collection in the stay of proceedings.
Frequently asked questions
Is OPD a bankruptcy?
No. It is a separate part of the Bankruptcy and Insolvency Act that consolidates debts for repayment in full. It is not administered by a Licensed Insolvency Trustee.
Can a creditor refuse OPD?
For claims within the Act's coverage, the court order binds the creditor. Larger claims need consent. Creditors have 30 days to object before the order is made, and any affected party can ask the court to review the order within 15 days after it is made.
What if I miss OPD payments?
The order can be enforced or set aside, and creditors may resume action. Contact the administrator before missing payments.
Can I leave OPD for a consumer proposal?
Yes. If repaying in full becomes impossible, see a Licensed Insolvency Trustee about a consumer proposal.
Sources
- Justice Laws Website — BIA Part X, ss. 217–242 (Orderly Payment of Debts), and the Orderly Payment of Debts Regulations (C.R.C., c. 369)
- Money Mentors — Alberta OPD program
- Government of Nova Scotia — provincial consumer and debt services
- Office of the Superintendent of Bankruptcy — debt options overview
