How many times can an individual file bankruptcy?

Posted on 20 December 2021

Written by Ashvin Sharma

Ever wondered how many times can an individual file bankruptcy? Perhaps you have already filed bankruptcy once before, and may find yourself in a situation where you are facing overwhelming debt once again. So, can you file bankruptcy a second time? And what are the consequences involved in doing so? What if you need to file bankruptcy a subsequent time – is that possible? In this article, we share the answer to ‘how many times can an individual file bankruptcy?’ As one of the leading bankruptcy firms in Canada, our reputable Licensed Insolvency Trustees will provide credit counselling to help you through any financial situation, no matter how bad you feel it may be. There is always a solution to get you on the pathway to financial freedom, and we are here to help you.

Can you file a second bankruptcy?

Bankruptcy is often considered a last resort when it comes to debt relief, but for many it is the most appropriate option out there. There are a number of key advantages of filing bankruptcy in Canada. As well as relieving you of the overwhelming stress of unmanageable debts, there are many other benefits. These include generating a stay of proceedings, which prevents creditors or collection agencies from contacting you or pursuing legal action against you. Many individuals are nervous about the cost of bankruptcy, and it is actually not linked to the amount of debt you have, making it an ideal choice for those with significant amounts of debt. Aside from any assets you may have, all your unsecured debt is legally cleared from bankruptcy also. In rare instances, filing bankruptcy may be repeated. Provided you have been discharged from bankruptcy, you are able to file for a second bankruptcy. Around 10% of bankruptcies in Canada are for individuals who need to file 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. If you repeat bankruptcy, it can become more restrictive. For instance, with a second bankruptcy, you do not qualify for an automatic discharge from bankruptcy within nine months. In fact, a subsequent bankruptcy is likely to last between a year to three years, depending on what surplus income you may have. A Licensed Insolvency Trustee will ask the court to listen to your application for discharge, to which the court will then decide the terms of your discharge. This includes the duration for which you will be in bankruptcy, and whether or not you need to continue making payments in bankruptcy. Creditors are also able to appeal your discharge, which could mean it takes longer for you to enjoy life after bankruptcy. This stresses the importance of having a reputable Licensed Insolvency Trustee to support you through the process, including offering advice on how to rebuild your credit score. While a first bankruptcy will stay on your credit report for six to seven years, a second bankruptcy can last up to fourteen years, which is worth considering before you proceed.

How often can you declare bankruptcy?

How many times can an individual file bankruptcy? Well, the reality is that you can file bankruptcy as many times as you like. The consequence is that the process will become increasingly restrictive, so other approaches may be more beneficial. If you file bankruptcy for a third time, you will need to attend a discharge hearing in a bankruptcy court. Here, they will ask you to explain to the judge why you filed bankruptcy three times, and they will then decide if you can be discharged. There could also be conditions including additional payments. If you find yourself in a situation where you repeatedly need to file bankruptcy, an experienced Licensed Insolvency Trustee can help you. At Spergel, our bankruptcy trustees have been helping Canadians become debt free for over thirty years, and we will offer credit counselling to help you with budgeting and financial management. Unlike other bankruptcy firms, you are assigned a trustee to walk you through the entire process, so we are a great first point of call when it comes to bankruptcy and getting your life back on track.

How do you file a subsequent bankruptcy?

Filing for a second or subsequent bankruptcy is a difficult decision that cannot be taken lightly. If you are considering this option, your first step should be to contact a trusted Licensed Insolvency Trustee immediately. They will advise you by reviewing your financial circumstances and considering other options available to you. As the only professionals in Canada legally able to administer all types of debt relief, they are best placed as the experts to helping you on the pathway to financial freedom. It may be that a bankruptcy alternative like a consumer proposal is more appropriate to help you in your situation. If you do choose to proceed with a second or subsequent bankruptcy, at Spergel, you are in great hands. Our debt relief experts have been helping Canadians gain financial freedom for over thirty years, and you will be assigned your own trustee to walk you through each and every step of the debt relief process.

Still curious about how many times can an individual file bankruptcy? Book a free consultation with one of our reputable Licensed Insolvency Trustees. We will offer you advice on your unique financial circumstances, and will walk you through each step of the debt relief process. If you are considering bankruptcy, get in touch today – you owe it to yourself.


Ashvin Sharma

Ashvin Sharma is a Chartered Insolvency and Restructuring Professional and LIT (Licensed Insolvency Trustee) overseeing all of Spergel's offices in the Greater Vancouver Area and British Columbia. He is also our resident expert on homeownership debt and health debt. In his spare time, Ashvin loves to play sports, spend time with family and friends, and serves as a volunteer coordinator for "Free-Them", a Canadian organization committed to raising awareness about human trafficking.

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