Can I file a consumer proposal multiple times?

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In Canada, a consumer proposal is a judicial debt settlement agreed with creditors to reduce your debt, administered by a Licensed Insolvency Trustee. The consumer proposal must be paid within five years or less with the help of monthly payments. Being a great alternative to bankruptcy, a consumer proposal enables you to keep your bank assets.

Multiple Consumer Proposals

Legally there is no limitation to how many consumer proposals you can file in Canada as long as you qualify for the same. Unlike bankruptcy, there are no compulsory limitations in terms of time or cost either for a consumer proposal. If you file bankruptcy for a second time, your discharge will elongate and likely cost more. You will most likely need to go to court to apply for a discharge with a third bankruptcy. In contrast, following consumer proposals depends on your creditor’s willingness to accept your proposal. If you have already finished a consumer proposal and the terms applied in the agreement, you can file another consumer proposal if necessary. Every consumer proposal is the same; it is always determined by your ability to pay. There is no additional fee for a second or third consumer proposal.

You cannot file two consumer proposals together simultaneously. You will need to complete your first consumer proposal. If you need help with new debts after completing the first proposal, you can file another consumer proposal. If that debt is too high for you to resume your current consumer proposal payments, you can amend your consumer proposal and file another insolvency.

Filing a second proposal has the exact steps of a first consumer proposal. Moreover, a second proposal filing is no different in terms of your credit compared to a first proposal. Like any other consumer proposal, a note stays on your credit report for three years after completion or six years after that date of filing, whichever comes sooner.

Missed Payments and Annulled Proposals

Your first consumer proposal is annulled if you have missed several payments. Then, you cannot file a second consumer proposal before your original proposal is complete. Instead, it is possible to bring back your annulled consumer proposal instead of filing for a new one to be cleared of your existing debt. An annulled consumer proposal should be possible to restore within 30 days of its annulment.

Do you wish to file a Consumer Proposal? If you have more questions, free and expert consultation on Consumer Proposal filing, consider reaching a Licensed Insolvency Trustee. Contact Dana MacRae – Licensed Insolvency Trustee, for more details.

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