Filing a Consumer Proposal Twice: Is It Possible?
Consumer proposals are popular debt relief solutions that offer an alternative to bankruptcy. However, many debtors often wonder: Can You File a Consumer Proposal More Than Once?
Let’s break this down.
Understanding Consumer Proposals
A consumer proposal is a legal procedure that’s managed by a Licensed Insolvency Trustee. It involves making an offer to your creditors to pay back a percentage of what you owe over a specific period, up to a maximum of five years. Once agreed upon, all interest charges stop, and creditors cannot take legal action against you.
Can You File a Consumer Proposal More Than Once?
The short answer is: Yes. But it’s subject to certain rules and conditions. We’ll discuss these in detail in the next sections.
Filing a Second Consumer Proposal After Discharge
If you’ve submitted a consumer proposal, successfully completed it and got discharged, and then happened to incur new debts, you can file a second consumer proposal on those new debts. Remember, this applies to new debts incurred after the discharge of your first proposal.
Filing a Second Proposal After Failure
On the other hand, if your first consumer proposal fails – perhaps because you couldn’t make the payments, you can’t file another proposal on the same debts unless you get court approval.
The Complex Rules
The rules around filing a debt proposal more than once might seem straightforward, but they’re more complex than they appear. Let’s talk about them.
The Role of the Court
As mentioned earlier, if your first consumer proposal fails, you can’t file another proposal on the same debts without court approval. This is to prevent abuse of the system and to ensure that debtors are serious about their commitment to repay their debts.
The Role of the Trustee
The role of the bankruptcy trustee is crucial in this process. They’re responsible for administering the consumer proposal and ensuring that all parties, including the debtor and the creditors, adhere to the terms of the agreement. They can also provide advice and guidance on whether it’s advisable or possible to file a second proposal.
Consult a Local Bankruptcy Canada Bankruptcy Trustee
If you’re considering filing a consumer proposal more than once, it’s highly recommended to consult a local Bankruptcy Canada Bankruptcy Trustee. They can provide you with more details tailored to your specific situation and can guide you through the complex rules and processes related to consumer proposals.
Conclusion
So, Can You File a Consumer Proposal More Than Once? Yes, you can. But it’s subject to rules and conditions. It’s always advisable to seek professional advice before making such decisions.
