How Often Can You File Bankruptcy?

Can I File Bankruptcy More than Once?

I have seen people file bankruptcy for the third time and have heard of people filing 4 or 5 times. Bankruptcy statistics tell us that about 10% of bankrupts are filing for the second time. Each time a person files bankruptcy it is increasingly more difficult for them to get released (discharged) from bankruptcy. A first time bankrupt is eligible for a 9 month automatic discharge if they fulfill all their duties and who do not have excess income. (Required monthly payment of less than $100.00 per month). If the person has a higher income (Required monthly payments of more than $100.00 a month) the discharge will be after 24 months.

Second Bankruptcies Take Longer

A second time bankrupt is eligible for a 24 months automatic who do not have excess income (Required monthly payment of less than $100.00 per month). If the person has a higher income (Required monthly payments of more than $100.00 a month) the discharge will be after 36 months. For third and more times filing bankruptcy, the bankrupt must seek his discharge at court and explain to the court the reasons for filing bankruptcy so many times. The courts have the power to refuse the discharge or impose additional payments for the debtor to pay. A second bankruptcy will also have an impact on your credit report. The major credit reporting agencies in Canada generally report a first bankruptcy for six or seven years after the date of discharge. A second bankruptcy can remain on your credit report for up to 14 years, or twice as long as a first bankruptcy. This can have a negatively impact your ability to borrow in the future. People who are faced with a second or third bankruptcy should consider a consumer proposal. A consumer proposal is not a bankruptcy so filing a consumer proposal will not result in the penalty as a bankruptcy would and it will erase your debts and give you a fresh start. If you have declared bankruptcy more than once you will notice that the consequences become more severe. Multiple bankruptcies results in increased surplus income payments, longer time as a bankrupt, and the record will remain on your credit report much longer, making it harder to improve your credit rating. For third time bankrupts, you might be required to attend bankruptcy court to get your discharge. If you have filed bankruptcy in the past and are dealing with money problems again, you should look for an alternative to bankruptcy. If you have any questions about this or other aspects of bankruptcy or consumer proposals you can set up a FREE consultation with our trustees.

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