Can you file twice for a consumer proposal in Waterloo?

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You may have previously cleared debt by filing a consumer proposal in Waterloo and have again found yourself in another debt that requires you to file another consumer proposal to pay it off. When you find yourself needing another consumer proposal to pay off debt after previously becoming debt free through a similar plan, you may wonder if this is possible. Yes, filing a second consumer proposal for your current debt is possible even if you have already become debt free using a similar plan in the past. 

This article clarifies when it makes sense to apply for a consumer proposal twice and how the process works. 

Filing for a consumer proposal twice

Procedure for filing a second consumer proposal

The procedure for filing subsequent consumer proposals is not different from what you did while filing the first. 

The procedure involves:

  • working with a Licensed Insolvency Trustee (LIT) who can evaluate if you can reasonably afford to repay your creditors
  • presenting your proposal to your creditors by your LIT
  • Your creditors are voting on whether or not they accept the proposal
  • Accepting or rejecting the proposal by the majority of your creditors

Your consumer proposal is accepted by a majority. It is binding on all of them.

Note that you can only apply for a second consumer proposal after you have been discharged from your first plan. You can, however, file a consumer proposal again if you have completed your proposal and you want to clear debts accumulated after the date of filing your previous proposal. 

Can I file if my first proposal was annulled?

Your consumer proposal is automatically annulled if you default payment three times. You can only revive your annulled proposal but cannot file for another one to pay off your old debts. You will be able to automatically activate your consumer proposal within 30 days of its annulment. Beyond that, you may need to go to court to revive your annulled consumer proposal. 

Can I file another proposal while having a current one?

Note that:

  • You cannot include a new debt in your current proposal
  • You cannot file a second consumer proposal on new debt while in an active consumer proposal

If you are unable to repay your new debt while servicing your current proposal, your options are:

  • To collapse the current proposal or 
  • To amend the existing proposal 

Whichever option you choose, you can then file another insolvency. 

For how long will a second consumer proposal stay on my credit report?

Just like a first consumer credit note, a second one will also remain on your credit report for three years after you complete repaying or six years from the date you filed, depending on what comes first. 

Is there a limit to the number of consumer proposals I can file in my lifetime?

Unlike bankruptcy, there is no time or cost limit regarding how many consumer proposals you can legally file, as long as you qualify. For example, you will be required to attend court to obtain your discharge if you file bankruptcy a third time. On the other hand, the success of a subsequent consumer proposal in Waterloo depends entirely on what your creditors are willing to accept.

Will it cost me more to file a second consumer proposal?

The cost of your consumer proposal is determined by your situation, not the number of times you have filed. Some creditors may, however, require more onerous proposal terms in each subsequent consumer proposal you file with them. 

Do you need professional help?

If you are considering filing a consumer proposal in Waterloo for a second time and need a trustee for advice, contact Dana MacRae. We have nearly two decades of experience with consumer proposals and personal bankruptcy advice. Our team will help review your options and find the best solution for your unique financial situation. Contact us today!