Can You File A Second Consumer Proposal?
Filing A Second Consumer Proposal: Is It Possible?
A consumer proposal offers an alternative to bankruptcy in Canada.
If you have filed a consumer proposal before, you might be wondering whether it is possible to do it a second time.
Although your first consumer proposal might have helped you to get out of debt, there is no guarantee that you won’t face further financial problems in the future.
If a consumer proposal helped you the first time, it could allow you to work out your finances again, and still keep your assets.
But is it possible to file a second consumer proposal?
Filing a Second Consumer Proposal
It is possible to file a consumer proposal if you have filed one before.
However, there is a requirement to have been discharged from the previous proposal first.
You can’t have two consumer proposals at the same time.
Although you may be dealing with new debts, you need to wait until the first consumer proposal is complete before you can file another one.
It is possible that you began a consumer proposal before, but it was not completed.
In this case, filing a second consumer proposal is difficult.
You would first need to create an arrangement to pay the creditors from your first consumer proposal before you would be able to start a second one.
It might be necessary to file bankruptcy to get rid of your previous debts.
When you file a consumer proposal, you need to make your payments on time.
If you miss three of the payments that you are required to make and fail to bring them up to date, your proposal will be annulled.
If this happens, your creditors will be able to take legal action against you to collect the full amount of the debt that you owe them.
This can lead to the need to file for bankruptcy in order to deal with your debt.
Unlike a consumer proposal, bankruptcy involves selling some of your assets to help pay for your debts.
It gives you the option to discharge most of your unsecured debts, so it might be an option that is right for you.
Filing a Consumer Proposal
If you have never filed a consumer proposal or need a reminder of how it works, it’s useful to understand consumer proposals before doing anything else.
A consumer proposal allows you to keep your assets and create a plan to pay back a proportion of your debts to your creditors.
The plan is designed to help you pay what you owe within one to five years, with the option to complete the plan faster than originally planned if you are able to.
When you file a consumer proposal, it will remain on your credit report for three years from the date that you are discharged.
Working with a Licensed Insolvency Trustee is necessary if you want to file a consumer proposal.
They are the trained and licensed professional who will file the proposal for you, as well as guide you through what a consumer proposal entails and how to complete the process.
The trustee will be the administrator for your proposal and will help to work out a fair deal with your creditors.
They will send an offer to your creditors, and they will have 45 days to vote on it.
If the majority of them accept the proposal, they must then follow its terms.
However, if it is rejected, it is possible to submit a new proposal to find terms that your creditors will agree to.
As you are with bankruptcy, you will be required to attend two credit counselling sessions during the proposal process.
Credit counselling helps you learn to manage your money so that you can avoid more problems with debt in the future.
You will make payments to your trustee, who will use them to pay your creditors.
When you have completed the consumer proposal process, and your debts have been discharged, you will be able to begin rebuilding your finances and credit score.
If you need help with filing a consumer proposal, Bankruptcy Canada has the information that you need to get it done.
We can help you to find a Licensed Insolvency Trustee, who will talk to you about consumer proposals and whether filing a second consumer proposal might be the right option for you.
They can also help you to consider the other debt relief options that are available to you so that you can choose the best solution.