Have you ever wondered how many times an individual can file for bankruptcy? You may have already filed for bankruptcy once before and can find yourself in a situation where you face overwhelming debt again. So, can you file for bankruptcy a second time? What are the outcomes involved in doing so? In this article, we share the answer to ‘Is there a limit to how many times a person can file for bankruptcy?’
Can you file a second bankruptcy?
There are several advantages of filing for bankruptcy in Canada. Bankruptcy relieves you of the overwhelming pressure of unmanageable debts and generates a stay of proceedings, preventing creditors or collection agencies from reaching you or pursuing legal action against you. Aside from any assets you may have, all your unsecured debt is also legally cleared from bankruptcy. You can file for a second bankruptcy if you have been discharged from the first bankruptcy. In rare instances, filing for bankruptcy may be repeated. Around 10% of bankruptcies in Canada are for people who ought to file for bankruptcy more than once.
What are the consequences of filing a second bankruptcy?
In the circumstances in which you may need to file a second bankruptcy, there are some long-term consequences.
With a second bankruptcy, you do not qualify for an automatic discharge from bankruptcy within nine months. A subsequent bankruptcy likely lasts a year to three years, depending on your surplus income. A Licensed Insolvency Trustee asks the court to attend to your application for discharge, and the court decides your discharge terms. This includes the duration for which you will be in bankruptcy and whether or not you need to persist in making payments in bankruptcy. Creditors can also appeal your discharge. The first bankruptcy remains on your credit report for six to seven years; a second one can last up to fourteen years, which is worth considering before proceeding.
How many times can an individual file for bankruptcy?
Well, the reality is that you can file for bankruptcy as numerous times as you like. Consequently, the process will become increasingly restrictive.
If you file bankruptcy for a third time, you must attend a discharge hearing in a bankruptcy court. They ask you to explain to the judge why you filed for bankruptcy three times, and they then decide if you can be discharged. There could also be conditions, including additional payments. If you see yourself in a situation where you repeatedly need to file bankruptcy, Dana MacRae, a Licensed Insolvency Trustee, can help you.
How do you file a subsequent bankruptcy?
Filing for a second or subsequent bankruptcy is a tough decision. If you are considering this option, your primary step is to contact a trusted Licensed Insolvency Trustee. They will advise you by reviewing your financial circumstances and evaluating other options. As the only professionals in Canada legally able to administer all types of debt relief, these experts help you on the pathway to financial freedom.