Let’s be honest: life can get expensive fast.
Maybe it started with just one missed credit card payment. Then came the payday loan. Then the car needed fixing… and next thing you know, your debts are piling up like dirty laundry you don’t even want to look at anymore. It’s easy to feel overwhelmed and unsure of what to do. Should you declare bankruptcy? Maybe consider a consumer proposal?
But wait—before you go down either of those roads, there’s another lesser-known option that could help: it’s called the Orderly Payment of Debt (OPD) program. It’s a structured, government-legislated plan that lets you pay off your unsecured debts in a manageable way, often with a reduced interest rate. It’s not a one-size-fits-all solution, but for some Canadians, it could be the perfect fit.
Let’s break it down so you can decide if this program might be your financial reset button.
Key Points
- An ODP is a debt consolidation program legislated under the Bankruptcy and Insolvency Act (BIA).
- You’ll repay your debts in full with an interest payment set at 5%.
What Is an Orderly Payment of Debt (OPD)?
Think of OPD as a debt consolidation program—but with legal teeth.
Also known as a Consolidation Order in some provinces, OPD is a program under Canada’s Bankruptcy and Insolvency Act. It’s designed for people who are struggling with unsecured debt (like credit cards, lines of credit, and payday loans) and want a way out without declaring bankruptcy.
Instead of juggling multiple payments, OPD rolls your debts into one monthly payment, often at a much lower interest rate (usually around 5%). You pay that one amount over a period of up to 5 years, and the court protects you from creditors as long as you stick to the plan.
In short: OPD helps you get back on track with dignity—and without torching your entire credit history.
Orderly Payment Of Debt Program Features
| Interest Rate & Fees | – One of the biggest perks: your interest rate is capped at 5% (significantly lower than the typical 19–30% on credit cards). – No more late fees or extra penalties piling on. |
| Term Length | – You have up to 5 years to pay off your debts. – The plan is structured to be realistic—so you’re not drowning month to month. |
Eligibility | To qualify for OPD, you generally need: – A stable source of income (since you’ll be making regular monthly payments). – To be a resident in a province that offers the program. – Unsecured debt (credit cards, payday loans, personal loans, etc.). Secured debts (like mortgages or car loans) aren’t eligible. |
What Kinds Of Debt Are Covered Under OPD?
OPD isn’t a magic wand that wipes out every kind of debt, but it covers a decent chunk of the stuff most people struggle with.
| Debts Included In An ODP | Debts NOT Included In An ODP |
| – Credit cards – Personal loans – Payday loans – Overdrafts – Lines of credit – Utility bills (in some cases) – CRA tax debts (sometimes included, depending on the agreement) | – Mortgages – Car loans (secured loans) – Student loans (unless you’ve been out of school for at least 7 years) – Child or spousal support – Court fines or penalties |
How To File For An Orderly Payment Of Debt
So, you’re thinking OPD might be your jam? Here’s how to get started:
1. Contact A Local Administrator
You’ll need to work with a licensed administrator—usually a non-profit credit counselling agency or a government body. They’ll assess your financial situation and help set up your plan.
2. Submit A Court Application
Once your plan is created, the administrator will apply to the court for a Consolidation Order. This legally binds your creditors to the payment plan and stops collection calls, wage garnishments, and lawsuits.
3. Start Making Payments
You’ll make one monthly payment to your administrator, who then distributes the money to your creditors.
Where Can You Find Orderly Payment of Debt Administrators?
Unfortunately, OPD isn’t available nationwide, but here’s where you can access it:
| Alberta | Money Mentors is the only organization legislated to provide OPD in Alberta. |
| Nova Scotia (aka. Consolidation Order) | Call 902-424-5200 or 1-800-670-4357 Website |
| Saskatchewan | Contact: Provincial Mediation Board |
Note: In Quebec, they offer a Voluntary Deposit Service (also called the “Lacombe Law”).
It’s a similar idea to the ODP, a legal way to pay off debts in installments. Interest is reduced, and you make payments through the court.
If you’re not in one of these provinces, OPD might not be available, but you can still speak to a credit counsellor for other options like a consumer proposal.
Does OPD Impact Your Credit?
Let’s be honest—enrolling in the Orderly Payment of Debt (OPD) program will affect your credit score. However, the impact isn’t as severe as filing for bankruptcy. Once you enter an OPD, it’s reported to the credit bureaus as an R7 rating, which is the same classification used for a consumer proposal. This rating tells lenders that you’re settling your debts through a formal arrangement but are still committed to repaying what you owe.
The R7 status will stay on your credit report for two years after you complete the program. That’s not forever—and it’s actually much shorter than a bankruptcy, which appears as an R9 and can stay on your file for six to seven years.
The good news? Because you’re repaying your debts in full (with interest), future lenders may view your financial responsibility more positively than if you had chosen to walk away from your obligations entirely.
The Upsides: Benefits Of OPD
If you’re feeling overwhelmed by debt but want to avoid the long-term damage of bankruptcy, the Orderly Payment of Debt (OPD) program offers several advantages that could make it a smart alternative.
Lower Monthly Payments
One of the biggest benefits is that your debt is consolidated into a single monthly payment. Since the program can last up to five years, the payments are spread out in a way that makes them much more manageable for your monthly budget.
Reduced Interest
The interest rate on your consolidated debt is capped at 5%, which is significantly lower than most credit cards and payday loans. This reduction in interest can save you thousands of dollars over the life of the repayment plan.
Legal Protection
Once your repayment plan is approved by the court, your creditors are legally prohibited from taking collection actions against you. That means no more collection calls, lawsuits, or wage garnishments—as long as you stick to your payments.
Structure and Support
OPD isn’t just about numbers. It also comes with built-in professional guidance. Your plan is developed and managed by experienced administrators who help you stay on track, and the structure helps you develop better long-term financial habits.
The Downsides: Drawbacks Of OPD
While the Orderly Payment of Debt (OPD) program offers many benefits, it’s not without its drawbacks. Like any structured debt solution, it comes with trade-offs that are important to understand before committing.
Impact on Credit Score
Enrolling in the OPD program will negatively affect your credit score in the short term. It’s recorded as an R7 rating on your credit report, indicating that you’re repaying your debt through a formal arrangement. While this rating is better than bankruptcy (R9), it can still limit your ability to borrow new credit during the program and for a couple of years after. The good news is, once you’ve completed the plan, you can begin rebuilding your credit more quickly than if you had filed for bankruptcy.
Legal Commitment
OPD is a legally binding program, which means you’re obligated to make your payments on time every month. Missing payments or defaulting on your plan can lead to the loss of legal protections, allowing creditors to resume collection efforts or even take legal action.
Limited Availability
Unfortunately, OPD isn’t available across all provinces in Canada. If you live outside of Alberta, Nova Scotia, or Saskatchewan, your options may be limited. Also, moving to another province during the program can create complications and disrupt your plan.
Orderly Payment of Debt vs Consumer Proposal
Both OPD and consumer proposals help you avoid bankruptcy, but they work in different ways. Here’s a side-by-side comparison:
| Feature | Orderly Payment of Debt (OPD) | Consumer Proposal (CP) |
| Debt Forgiveness | No (you pay 100% + 5% interest) | Yes (you can settle for less) |
| Debts Covered | Unsecured only | Unsecured only (incl. CRA debts) |
| Length of Program | Up to 5 years | Up to 5 years |
| Interest Rate | Capped at 5% | Usually 0% |
| Monthly Payment | Fixed | Negotiated based on affordability |
| Credit Impact | R7 (removed 2 yrs after completion) | R7 (same) |
| Legally Binding | Yes | Yes |
| Administered By | Government-approved agency | Licensed Insolvency Trustee |
| Available Across Canada? | No | Yes |
Learn more: Consumer Proposals
Bottom Line: Is OPD Right for You?
The Orderly Payment of Debt program isn’t a silver bullet—but it is a strong, dignified alternative to bankruptcy. If you have steady income, manageable (but stressful) unsecured debts, and live in a province that offers OPD, this could be your path to a cleaner slate.
Just remember: it’s always wise to speak to a non-profit credit counsellor or licensed professional who can walk you through your specific situation.
