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How many times can you file a consumer proposal?

Posted on 6 December 2021

Written by Gillian Goldblatt

A consumer proposal is a great way of reducing your debt by up to 80%, and is the chosen form of debt relief for many Canadians each year. A consumer proposal is a legal negotiation made by a Licensed Insolvency Trustee on your behalf. In most cases it leads to a significant reduction in your debt, while allowing you to keep your assets and preventing creditors from contacting you. So what happens if a consumer proposal works for you, but if you need to file another one later down the line? And how many times can you file a consumer proposal? In this article, we answer everything you need to know about filing a consumer proposal more than once.

What is a consumer proposal?

A consumer proposal in Canada is a legal debt settlement that must be administered by a Licensed Insolvency Trustee as per the Bankruptcy and Insolvency Act. A Licensed Insolvency Trustee is the only professional legally able to administer both consumer proposals and bankruptcies, the most powerful forms of debt relief. For this reason, they are able to offer advice across all forms of debt solutions in Canada. A consumer proposal can be considered a legal negotiation that is agreed with creditors to reduce your debt. You will work with a Licensed Insolvency Trustee to agree on a manageable amount for you to repay on your debt each month. Your trustee will then work to strike a deal with your creditors. Once a consumer proposal has been filed, a stay of proceedings come into play, which means creditors can no longer contact you. A consumer proposal is a great alternative to bankruptcy, and it also enables you to keep your assets. As well as providing peace of mind, at Spergel you will receive your own Licensed Insolvency Trustee to walk you through each step of filing a consumer proposal.

How many times can you file a consumer proposal?

Unfortunately for some people, despite gaining debt relief through a consumer proposal, they can revert back to finding themselves in debt once again. A common question, therefore, is ‘how many times can you file a consumer proposal?’ It is indeed possible to file a consumer proposal more than once. In fact, unlike a bankruptcy, there is no limit to the amount of times you can file a consumer proposal. With bankruptcy, if you file a second time, your discharge will take longer and will likely cost more. With a third bankruptcy, you would likely need to go to court to apply for a discharge. In contrast, subsequent consumer proposals are simply based on your creditor’s willingness to accept your proposal. If you have already completed a consumer proposal and the terms involved in the agreement, you can absolutely file another consumer proposal if needed.

What if my first consumer proposal was annulled?

In some cases, your first consumer proposal may have been annulled. This may occur if you missed several payments. In this scenario, you cannot file a second consumer proposal before your original proposal is completed. Instead, to be cleared of your existing debt, it is possible to bring back your annulled consumer proposal instead of filing for a new one. An annulled consumer proposal should be possible to revive within a month of its annulment. Any longer, and you need to go to the court for approval on revival or to file another consumer proposal. If you are unsure on how to go about reviving a consumer proposal or want to file a second, the best thing to do is speak to a Licensed Insolvency Trustee for advice on your situation. This is the best workaround for filing two simultaneous consumer proposals.

What are the costs of subsequent consumer proposals?

Now that you have the answer to ‘how many times can you file a consumer proposal?’, you may be wondering about the cost. It is likely good news to hear there is no cost increase or additional fee for any second or third consumer proposal you file, and that each consumer proposal is the same as before. The cost of a consumer proposal is always dependent on the amount you are able to pay, which will be a manageable monthly payment for up to five years. Your Licensed Insolvency Trustee will work with you to ensure you commit to a reasonable amount that works for you. Learn more about other advantages of consumer proposals.

How do you file a consumer proposal?

If you meet the criteria for being able to file a new consumer proposal, Spergel can help you gain peace of mind by reviewing your financial circumstances. If a consumer proposal seems to be the right fit for you, there are some simple steps for you to file a subsequent consumer proposal. The process is the same as the first, but you may need some additional support to prevent you from having to file a subsequent consumer proposal. We have been helping Canadians gain debt relief for over thirty years, and can help you too. You simply need a reputable Licensed Insolvency Trustee to offer advice and qualify you for a consumer proposal application. Your trustee will then work to draft your proposal with you to submit to your creditors, and if accepted, will file the consumer proposal documents. A stay of proceedings will be generated, and you can move on with your life once again. Learn more about how to file a consumer proposal.

If you want to learn more about ‘how many times can you file a consumer proposal?’ or filing subsequent consumer proposals, book a free consultation with Spergel. No matter what your financial situation may look like, we can find a form of debt relief tailored to you. The sooner you reach out, the quicker we can get you on the pathway to a life free from the stresses of unmanageable debt.

Gillian Goldblatt

Gillian Goldblatt

Gillian Goldblatt is a Chartered Professional Accountant and Insolvency and Restructuring Professional. She is also an award-winning LIT (Licensed Insolvency Trustee) and Vice-Chair of the Ontario Association of Insolvency & Restructuring Practitioners Board. As Spergel's resident expert on debt consolidation and financial literacy, you can find Gillian being interviewed regularly on popular Canadian news programs when she's not at the office helping individuals and businesses get back on track.

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