Exploring the Possibility of Multiple Consumer Proposals
Coming to terms with a debt issue can be daunting, and if you’ve previously grappled with debt, you may feel even more anxious or uncertain about how to tackle your current predicament. If you’re struggling with debt again, remember that you’re not alone – you do have options to help you manage your debt and continue with your life, even if you’ve previously been through a Consumer Proposal or bankruptcy. The question we’ll explore is: Can I Do a Consumer Proposal More Than Once?
Understanding Consumer Proposals
A Consumer Proposal is a formal, legally binding process that is regulated by the Bankruptcy and Insolvency Act. It’s a debt relief solution that allows you to come to an arrangement with your creditors to pay a percentage of what you owe, extend the time you have to pay off your debts, or a combination of both.
Second Consumer Proposal: Is It Possible?
If you’ve previously filed and completed a Consumer Proposal, or personal bankruptcy, it doesn’t render you ineligible from using a Consumer Proposal to manage debt again. Whether you’ve done a Consumer Proposal before, or have previously completed a personal bankruptcy, a Consumer Proposal is a potential debt management option that can be considered to help you resolve your current debt challenges.
The Process of Filing a Second Consumer Proposal
The process of filing a second Consumer Proposal is virtually the same as the first time. Here are the basic steps:
- A consultation with a Licensed Insolvency Trustee.
- Assessment of your financial situation.
- Creation of the Consumer Proposal.
- Submission of the Consumer Proposal to your creditors.
- A waiting period for your creditors to accept or reject the Proposal.
- Implementation of the Proposal if accepted.
Benefits of a Consumer Proposal
There are numerous benefits to a Consumer Proposal:
- Debt Reduction: A Consumer Proposal offers the ability to cut total debt down to what you can afford to repay.
- Interest Freeze: Once a Consumer Proposal is filed, all interests are frozen.
- Flexible Payment: The payment terms in a Consumer Proposal are flexible and can be adjusted to your financial capability.
Frequency of Filing a Consumer Proposal
There’s no restriction on how many times a person can file a Consumer Proposal. However, if you have consistently sought debt forgiveness through multiple insolvencies, government creditors such as the Canada Revenue Agency may expect a higher offer of repayment in subsequent Consumer Proposals.
The Cost of Filing a Second Consumer Proposal
There are no added fees to what you’re offering to your creditors in your Consumer Proposal, even if you’ve previously done a Consumer Proposal or bankruptcy. The fees for Licensed Insolvency Trustees in all Consumer Proposals are set by government tariff.
Impact on Credit History
A subsequent Consumer Proposal will reflect the same way on your credit history as the first Consumer Proposal. It’s marked as an ‘R7’ on your credit history report for three years after completing your Consumer Proposal, or six years from the date you filed your Consumer Proposal.
Modifying an Active Consumer Proposal
If you’ve accumulated new debts since your original Consumer Proposal was filed or there’s been an unforeseen change to your circumstances, you may need to modify your active Consumer Proposal. You can’t have multiple active Consumer Proposals at the same time, but you can amend an active one.
Detecting Debt Warning Signs
Recognizing the signs of escalating debt is crucial, especially if you’ve dealt with a debt issue before. These signs include:
- Excessive stress or constant worry about your debt.
- Only being able to make minimum monthly payments.
- Relying on credit to make up for income shortfalls.
- Increasing debt or unchanging balances despite making payments.
- Using credit to move money for payments, or borrowing from family or friends.
Seeking Professional Advice
If you’re grappling with debt, you don’t have to weigh your options alone. Connect with a qualified debt expert like a Licensed Insolvency Trustee for a free and confidential assessment and consultation. They’ll explain all your options, including informal debt management solutions, debt consolidation with a Consumer Proposal, or filing personal bankruptcy.
In conclusion, if you’re asking, “Can I Do a Consumer Proposal More Than Once?“, the answer is yes. It’s a legal and viable option for those who need a fresh start with their debt, even if they’ve previously filed a Consumer Proposal or gone through bankruptcy.
