You can file as many consumer proposals as you want as long as you have completed your prior consumer proposal before filing a new one. If you are currently in a consumer proposal and have new debts you want to include, you either need to finish your current proposal first or consider another insolvency option.
Have you filed a consumer proposal before to get relief from your debts, but find yourself in trouble again with your debts? If so, you may be wondering if I can avoid bankruptcy and file a consumer proposal again. The short answer is “yes,” but read on to find out more about filing a consumer proposal more than once.
What is a Consumer Proposal?
A consumer proposal is a legally binding agreement between you and your creditors to pay back a portion of your debt over a set period. It’s an alternative to bankruptcy that allows you to keep your assets while still providing relief from overwhelming debt. It must be completed within five years and usually involves monthly payments to a Licensed Insolvency Trustee.
How Many Times Can You File a Consumer Proposal?
You can file a consumer proposal as many times as you need to. However, if your creditors accepted your previous consumer proposal and fail to meet the agreed-upon terms, you may not be eligible to file another proposal.
When you finished your prior proposal, the Licensed Insolvency Trustee would have sent you a “Certificate of Full Performance of Proposal.” Once you receive this document, it means all of your previous debts have been discharged, and you become eligible to file a consumer proposal again.
How Do I File a Second Consumer Proposal?
If you need to file a second consumer proposal, you must work with a Licensed Insolvency Trustee who will review your current finances. The Trustee will review your current debts, assets, and income to help you develop a feasible and acceptable proposal to your creditors. Also, the Trustee will review that your prior consumer proposal was completed to ensure you are eligible to file another one.
Can I File a Second Consumer Proposal Before My Original Proposal is Completed?
If you are currently in a consumer proposal and have incurred new debts since filing it, you may wonder if you can include those debts in the current one. Unfortunately, the current proposal can’t be adjusted to include these debts. Your options would be to pay off the current proposal and then file a new proposal for the new debts or consider another insolvency option for all the debts.
If your creditors did not accept your first proposal or you withdrew it, you are still eligible to file another consumer proposal. However, you will need to work with your Licensed Insolvency Trustee to understand why your first proposal was not accepted and change your second proposal to address those concerns.
What if My Consumer Proposal Was Annulled?
If your consumer proposal was annulled, it means that you did not meet the terms of your agreement. This can happen if you miss your agreed payments. If your consumer proposal is annulled, you will need to work with your Licensed Insolvency Trustee to see if it can be revived or explore other options, such as bankruptcy.
If it has been less than a month since your consumer proposal was deemed annulled, then the Trustee can revive it. However, if it has been over one month, you will need to hire a lawyer to go to court to revive it.
If I Filed a Bankruptcy Before, Can I File a Consumer Proposal?
Yes, if you previously filed for bankruptcy, you are still eligible to file a consumer proposal. However, you must have completed all of the duties of the prior bankruptcy and obtained a discharge to include any new debts in a consumer proposal.
Does It Cost More if I File a Second Consumer Proposal?
There is no additional cost of filing second or more consumer proposals than filing your first one. The amount you will pay in the consumer proposal will depend on your current income, assets, liabilities and what your creditors are willing to accept.
How Long Does a Second Consumer Proposal Stay on My Credit Report?
A second consumer proposal will appear on your credit report as an R7 rating for three years from the date it is paid in full or six years from when filed, whichever is first. Unlike a bankruptcy, filing second or more consumer proposals will all stay on your credit record for the same period as filing your first one.
This credit rating can impact your ability to obtain credit in the future, but it is only temporary, and you can start rebuilding your credit even while in a consumer proposal.
In conclusion, a consumer proposal can be an effective solution for managing overwhelming debt. If you need to file a second proposal, it’s essential to work with a trusted Licensed Insolvency Trustee to develop a proposal that meets your current financial situation and addresses any concerns from your creditors. With the right approach, you can find relief from debt and get back on the path to financial stability.
If you would like a free consultation to review your finances, please complete our Assessment Form to see if you qualify.