If you are struggling to repay your debts, you are not alone. The average Canadian owes around $73,500 to banks; national household debt equates to $2,116.3 billion.
An ongoing debt problem can be incredibly overwhelming. It can throw your life into great uncertainty, making you anxious for your and your family’s future. There may be times you feel disheartened and worry you may never recover.
But the good news is that there are many ways to become debt-free. Filing for bankruptcy is a standard option, a legal proceeding with its positives and negatives. Another solution is a consumer proposal. But if you have struggled with debt for a long time, you may have already gone down this route and are wondering whether it is possible to file a second one.
Fortunately, the number of consumer proposals you can file in a lifetime is unlimited. But it would be best if you were entirely sure it is the right solution for your financial situation. The following article looks at the benefits of consumer proposals and when it makes sense to file a second one. Read on to learn more.
What is a consumer proposal?
A consumer proposal offers those in debt a legal way to settle for less than the amount they owe. It involves working with a Licensed Insolvency Trustee to negotiate a settlement between you and your creditors. Unlike filing for bankruptcy, which consists of eliminating your debts, a consumer proposal helps you formulate a payment plan for becoming debt free over time. This option gives you more control over your financial situation and protection over your existing assets, such as your house, business, or car.
How many times can you make a consumer proposal?
Whether you’re filing for bankruptcy or a consumer proposal, there is legally no limit to the number of times you can do so in your lifetime. You will still need to meet the eligibility criteria to file, meaning you must be insolvent and owe more than $1000. And the good news is that there is no penalty for filing a consumer proposal more than once. There are no negative implications to your credit score. Each filing remains on your credit report for three years after completion or six years after the filing date, whichever comes first.
How do I file a second consumer proposal?
If you wish to file a consumer proposal to relieve your debts, the process will be the same as your first one. You will work closely with a Licensed Insolvency Trustee who will evaluate your debts and financial situation. They will help you and your creditors develop a mutually agreed repayment plan that suits all parties. It’s important to note that you can only file up to one consumer proposal at a time, so you must complete the initial proposal before you proceed.
Do subsequent consumer proposals cost more?
The cost of the proposal will depend on your financial circ*mstances at the time. No reason a second consumer proposal should cost any more than your first one, and there is no additional fee for subsequent filings. It is based entirely on what you can pay, as determined by your Licensed Insolvency Trustee. A creditor from whom you have previously sought debt forgiveness may expect a higher repayment or more onerous terms the second time around. However, the reduced balance and added protection a consumer proposal affords can offer many advantages over repaying the debt in full.
In summary, there are so many benefits to filing consumer proposals, and it can be a great alternative to bankruptcy. Suppose you have previously filed a consumer proposal and find yourself struggling with debt again. In that case, there is no reason you cannot file another one relating to your new circ*mstances. If you qualify, there is no legal limit to the number of consumer proposals you can file in a lifetime.
For more information about filing a consumer proposal and becoming debt free, get in touch with Fox-Miles and Associates today for a free consultation.
