It’s an unfortunate yet unavoidable fact.
Just because someone gets into overwhelming debt and files a consumer proposal, that doesn’t mean they’ll be immune from trouble for life.
Debt can get on top of anyone, and it can happen easily – in fact, it happens to thousands of Canadians every day.
That’s why, here at BankruptcyCanada, we often hear the question, can you file for a consumer proposal twice?
Here’s the lowdown on that.
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Filing for a Consumer Proposal Twice is OK
Many people get into unmanageable levels of debt more than once in their life.
It’ll be a relief for some of you to learn that there isn’t a rule against filing a consumer proposal more than once.
The process is designed to get you financially healthy again – not to punish you.
Before you decide on a second consumer proposal, it’s essential to assess your circumstances and figure out if it’s the best way forward for you.
The single best way to do that is to talk with a local licensed insolvency trustee.
They’re best qualified and best placed to work out the best way forward – based on your particular situation.
How your trustee will assess your finances
Talking to a licensed insolvency trustee is easy, and you’ll learn everything you need to know in order to move on with your life.
The trustee will look at your household income and expenses to determine what you can afford to repay.
The idea is to get you out of hardship, so if you’re in a situation where you are using half or most of your disposable income to service debt – you can expect that to stop.
Once the trustee knows how much you can afford to repay, they’ll present a proposal to your creditors – who will vote on whether or not to accept.
For the plan to become binding for all your creditors, the majority need to vote in favour.
When you can’t file a second consumer proposal
- You can’t file two consumer proposals simultaneously.
If you already have one on the go, you’ll need to wait for discharge from that before beginning another.
- You can’t file for a new proposal just because your current one has been annulled.
An annulment occurs when you fail to meet three or more payments on the bounce – as per the agreed terms of your consumer proposal.
In that case, you’ve essentially defaulted on the proposed agreement, and you’ll need to try and revive the original proposal – rather than filing a new one.
You’ll need to act quickly in this situation because, after thirty days of annulment, you can’t simply automatically reestablish the proposal – and you’ll need to apply via the court.
The difference between repeated consumer proposals and repeated bankruptcy
Consumer proposals stay on your credit record for three years after the completion date.
That’s the case no matter how many proposals you’ve filed – they’re all recorded in the same way.
If your proposal agreement takes longer than three years to complete, the date it gets removed from your report will be six years after you filed.
There are no limits on how many times you can file for a proposal during your lifetime.
With bankruptcy, when you file a second time, a discharge will take longer to achieve.
That means you’ll have a bankrupt status for longer each time you file for bankruptcy.
The third time you file, you’ll even need to go to court before you can get discharged.
In terms of repeated consumer proposals, acceptance and conditions will ultimately get set by your creditors.
They’re the ones who decide whether or not to vote in favour of your proposal.
Getting help with debt
Here at BankruptcyCanada, we’ve helped thousands of Canadians get out of debt and on with their lives.
Give us a call today on (877) 879-4770 (24/7) for a friendly, no-obligation discussion about your circumstances.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal