From time to time, we see people in our offices needing financial help in Edmonton who have never heard of an Orderly Payment of Debts. In many cases, they come to us for legal protection against a recently initiated wage garnishment. They think declaring bankruptcy in Edmonton is the only way they can stop the garnishment.
What they do not realize is there are two non-bankruptcy options for which they might qualify. If you have searched the Internet for information on debt solutions, you know the Bankruptcy and Insolvency Act of Canada (BIA) established a distinct group of professional bankruptcy trustees to manage insolvency proceedings in Canada.
To get a trustee’s license we undergo extensive education and training and a rigorous series of licensing examinations. If you read the BIA, you might find the portion that outlines our responsibilities, one of which is to counsel everyone who comes to see us about all available debt solutions.
We manage a solution appropriate for large unsecured debt totals called a consumer proposal. However, there is another non-bankruptcy alternative more suitable for residents with moderate amounts of debt. It is called an orderly payment of debts, and it is only available through government-approved organizations in Alberta, Saskatchewan, and Nova Scotia.
Although we can help you determine if you qualify for an OPD and if it is the best solution for you, if you would prefer to go right to the source, Money Mentors is the only credit counseling agency in Alberta approved by the government to handle OPDs.
With an OPD, you repay all the unsecured debt you owe. You do this by replacing the multiple monthly payments you are now making with a lower single monthly payment. The amount of the payment is based on your current income and family size. It needs to be large enough to allow you to repay all you owe over four years at a reduced rate of interest, yet small enough to leave enough disposable income to stay of sound mind and body while in the program.
If your debt total is too high to qualify for an OPD, a consumer proposal might work for you. Here the single monthly payment is extended over a five-year period. Obviously, the five-year totals will not cover the total debt, so we propose reductions in the principal you owe to match what you can afford to pay. If we can show the creditors they stand to get more money back from you in a proposal than they would if you ended up in bankruptcy, they are often more than willing to accept.
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