Can You Do a Second Consumer Proposal?

If you’re here, you may have completed a consumer proposal but are facing financial difficulties again. Well, the good news is that yes—you can file a consumer proposal twice. However, there are a few important things you’ll need to keep in mind if you do decide to file multiple proposals.

In this article, we’ll look at what it means to file a second consumer proposal, how it affects your financial situation and credit, and when this might be the right choice for you.

Key Points

What is a consumer proposal?
So, can you file a consumer proposal twice?
Why might you choose a second consumer proposal?
How does a second consumer proposal affect your credit?
How to file a second consumer proposal
Take the next step to financial freedom today

What is a consumer proposal?

A consumer proposal is a legally binding debt relief option that allows you to settle unsecured debts (like credit cards, lines of credit, and other unsecured loans) through a new, affordable payment plan. One of our Licensed Insolvency Trustees (LITs) will work with you to come up with a repayment plan that fits what you can realistically afford. If your creditors accept the proposal, it stops collection calls and any legal actions against you, giving you peace of mind and a stable monthly payment that won’t overwhelm your budget.

Unlike bankruptcy, which may mean parting with some of your assets, a consumer proposal is designed to let you hold onto what matters most—like your home, your car, and access to certain credit options like secured credit cards. This offers a way to reduce your debt and work toward financial stability while keeping the things that are important to you.

So, can you file a consumer proposal twice?

Yes, it is possible to file a consumer proposal more than once. Life’s unexpected changes—like a job loss, surprise bills, or new debts—can make it difficult to stay debt-free even after completing a proposal. If you’re facing fresh debts after already completing one proposal, a second proposal might be a helpful solution.

However, there are a few key things to remember:

Complete your first proposal first: You need to have fully completed your first proposal before starting a second one. If your first proposal was annulled (meaning it was canceled due to missed payments), you may need to look into getting it back on track first. An LIT can help with this process. If you’re currently going through bankruptcy, you must fully complete this too before you can file a new proposal.
New debt only: If you’ve taken on new debt after completing your first proposal, a second proposal can address these amounts. However, any debts already covered under your first proposal won’t be eligible to be included in a new one unless it’s completed.

Why might you choose a second consumer proposal?

If you’re considering a second proposal, it’s probably because of an unforeseen bump in the road that has made your debts pile up again. Here are some common reasons people find a second proposal helpful:

Debt relief without declaring bankruptcy: If you’re trying to avoid bankruptcy, a second consumer proposal offers a less drastic alternative. Filing for bankruptcy has a bigger impact on your credit and may involve giving up some assets. A consumer proposal, on the other hand, allows you to settle your debt while keeping important assets like your home or car.
Flexible payment terms: A second proposal can adjust your payment terms to better match your current financial situation. If your income has dropped or your expenses have gone up, a lower monthly payment could help ease some of the financial pressure.
Protection from creditors: With a second proposal in place, creditors cannot take legal action against you, and collection calls will stop, giving you the breathing room you need to focus on your financial recovery.

How does a second consumer proposal affect your credit?

Let’s talk about how a second consumer proposal might affect your credit. When you file a consumer proposal, it is recorded on your credit report with an R7 credit rating, which shows that you’re repaying debt through a debt relief program. For a second proposal, this rating will again appear on your report and will remain there for a certain period—usually three years after completing the proposal or six years from when you filed it, whichever is shorter.

While an R7 rating does affect your credit, it’s definitely less severe than the R9 rating associated with bankruptcy. Over time, you can work to improve your credit through good spending habits, like consistent payments and, when ready, by using secured credit products like a secured credit card to start rebuilding your credit.

How to file a second consumer proposal

If a second proposal seems right for you, here’s a quick overview of what you can expect:

Consult with a Licensed Insolvency Trustee: Start by meeting with one of our LITs. We’ll take the time to fully understand your circumstances in a judgment-free space where you can talk openly about your finances. Our team is backed by years of experience and ready to help you find the right debt-relief option for you.
Create a new proposal: You want legal protection from creditor actions, such as wage garnishments or collection calls.
Creditors’ review: Just like your first proposal, creditors will review and vote on the second one. Since your creditors have already accepted one proposal from you, they may be a bit more cautious a second time round. But don’t worry—we will help you prepare a solid and fair plan that maximizes your chances of approval.
Begin payments: Once approved, you’ll start making your new monthly payments based on the plan’s terms. Keeping up with these payments is a really important part of making sure your proposal stays in good standing and doesn’t risk cancellation.

Take the next step to financial freedom today

We know that making this decision—and facing financial difficulties again—is difficult. But remember, you’re not alone, and we’re here to help.
Together, we can review your situation and help you decide whether a second consumer proposal or another debt relief solution is the best path for you. Our experienced team will guide you through every step, keeping you confident and in control of your journey toward financial freedom.

Don’t wait to get the help you need. Financial stability is within reach, and we’re here to help you reclaim it. Contact us today—let’s take this step together.