Highly valued debtors program to be greatly missed
Doug and Sue are faced with a financial crisis and are determined to do whatever it takes to gain control over their debts.
They want to pay their creditors and are in my office exploring their financial options. The couple has heard of a program called Orderly Payment of Debts (OPD) and wants to know how it can be of help to them.
Unfortunately, the OPD program has become a recent victim of B.C. government cuts, ceasing operations as of April 30. The OPD program has provided more debtors with unbiased financial information than any other financial service to date. The program’s closure will cast thousands of poor individuals and vulnerable families to the yellow pages.
These people will soon be phoning trustees or credit counsellors, only to find that there is little in the way of services available to them.
OPD has been in existence since the late 1960s. In 1975, as a loans officer at Vancouver City Savings Credit Union, I made what would be the first of many referrals to the counsellors at OPD. For a period of 16 years, the OPD program was essentially the only credit counselling service available to debtors.
As the national consumer debt expanded from $41 billion in 1980 to over $100 billion in 1990, B.C. could not keep up with the demand for alternatives to bankruptcy. Private sector credit counselling services began appearing and have worked alongside the OPD program ever since. With the changes to the Bankruptcy and Insolvency Act in 1992, the Trustees in Bankruptcy began offering consumer proposals for debtors.
There have been growing pains with private-sector competition in the industry, as well as the occasional belief that the OPD program was “stealing business” away from both trustees and credit counselling companies. However, there is no financial profit to be found in OPD’s activities.
In the beginning, OPD offered a service to the overcommitted debtor where the program received little or zero profit. In recent years OPD has responded to newer casualties of the credit society — such as the student loan crisis, leaky condos, and growing tax liabilities for individuals and families.
Once again, there is little financial profit to be uncovered.
In 1998, the OPD program split away from the consumer portfolio and the regulatory function of debt collection and credit reporting. OPD began to focus on separating families and providing mediation and counselling services at no cost to the debtor, creditor, or the family court. This initiative served to place the OPD program even farther away from the insolvency business and in the heart of another great social tragedy, the struggling family unit.
Once again, there is little, if any money to be made here.
With the closure of the OPD program, our industry will quickly discover how many free services were available in the past to people who are financially challenged.
Often people with severe financial problems are afraid and angry, and at times they can be belligerent. Starting April 30, there is no longer a destination to refer these unfortunate people to.
What is the cost of closing the OPD program?
The closure of the OPD program will increase credit counsellor’s costs, as many people turn to us for financial guidance and support.
Secondly, credit counsellors will lack a long-standing valuable resource, where, if all else failed, they could always send clients down to OPD.
Thirdly, there will be an increase in bankruptcy assignments for the poor and financially vulnerable. Possibly in the future, there may even be a need to create a new type of bankruptcy assignment to accommodate those who lack the ability to pay the bankruptcy fees.
Ministry statistics over the years have clearly established that the vast majority of clients for the OPD program need access to credit information. This information includes what constitutes harassment under the Debt Collection Act, what constitutes a proper and improper seizure of assets, what credit ratings are and how long will it affect the debtor, and many more questions and issues.
The OPD program has always provided the consumer with a great deal of information regarding bankruptcy itself, that will now undoubtedly come to credit counsellors and bankruptcy trustees. Yes, there may be new opportunities, but by and large, OPD has been a unique and special service in BC.
I am not alone as I mourn the death of the OPD in B.C. On behalf of the hundreds of clients I have referred to OPD over the last 27 years, I wish to extend a special thank you to Mr. Douglas Welbanks, director of the Debtors Assistance Program, and his excellent staff – you will be missed.
Next week: The option of bankruptcy for Doug and Sue.
