Filing a Second Consumer Proposal

Filing a Second Consumer Proposal

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated March 13, 2020

When debt woes have got you down, there are options to help you get back up. Depending on where you are on the spectrum of debt issues, there is a program or service that is best suited for you, and a consumer proposal may be it.    

Consumer proposals are usually the last resort that consumers take before filing for bankruptcy. Basically, a consumer proposal is an arrangement that you make with your creditors where you pay them a portion of what you owe, with the remaining balance forgiven. A consumer proposal may also include an arrangement where you pay back all the money you owe but receive an extended period of time to do so. Consumer proposals must be filed with the help of a Licensed Insolvency Trustee (LIT).

If your creditors agree to this arrangement, you can effectively stop the collections calls and be alleviated from your current debt. You’ll then be responsible for making the agreed-upon payments until your debt load is paid off.

It’s quite possible to find yourself in debt trouble again after having already dealt with debt issues in the past, and another consumer proposal might be something you’ve considered. But if you’ve already filed a consumer proposal in the past, can you file another? If so, how do you go about filing a second consumer proposal?

Wondering how much it would cost you to file for bankruptcy a second time? Find out here.

Can I File a Second Consumer Proposal?

Yes, it is possible to file a second consumer proposal. But it’s important to note that you can’t file another consumer proposal if your first one is still active.

Your first proposal needs to be discharged before you can file a second. Once you’ve completed your first proposal and have made all your payments it is possible to file a second consumer proposal.

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Will My Second Consumer Proposal Be Different From My First?

Filing a second consumer proposal is basically the same as filing the first one. You will need to deal with a Licensed Insolvency Trustee again who will look over your current finances and your budget to see what you can comfortably afford to pay back to your creditors.

The new proposal will then be presented to your creditors who will vote on whether to accept it or not. If the majority of the creditors accept, the proposal will go through and become a binding agreement among all involved.

The cost of a second consumer proposal won’t necessarily be more than your first. Instead, the cost of a consumer proposal – whether it’s your first or second – is based on your personal situation.

Just about all types of unsecured debt can be included in a second consumer proposal, such as:

  • Credit cards
  • Lines of credit
  • Payday loans
  • Personal loans
  • Unsecured student loans
  • Income tax debts

Qualifying for a second consumer proposal is also the same as qualifying the first time. In order to be eligible, you need to be at least 18 years old and owe no more than $250,000 in unsecured debts. Further, the total of all your debts must be more than the value of everything you own.

Click here to know how much debt you should have before you file a consumer proposal.

How Does a Second Consumer Proposal Affect My Credit?

Just like a first consumer proposal filing, a second proposal will likely cause your credit score to dip. When you file for a second consumer proposal, it will be noted on your credit report. For consumer proposals, credit ratings of R7 or R9 are usually noted, which will stay on your credit report for 3 years after discharge.

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Can I File a Second Consumer Proposal if I’m Still Working On My First?

While it’s possible to file a second consumer proposal, it’s important to note that you can’t file another proposal if your first one is still active. Your first proposal needs to be completed before you can file a second.

To find out what happens when your creditors reject your consumer proposal, look at this.

My Consumer Proposal Was Annulled Years Ago, Can I File Another?

If you miss three payments toward your consumer proposal, it will be annulled. If that happens and you default on your consumer proposal, you won’t be able to file a second consumer proposal to repay your old debts. In this case, you may have to rework your first annulled consumer proposal instead in order to deal with your debt.

You can revive an annulled consumer proposal automatically within 30 days of it being annulled. After 30 days, you will have to have it revived in court.

Read this to learn what a 100% consumer proposal is.   

Do You Need to File a Second Proposal?

If you’ve found yourself in debt again after already having gone through a consumer proposal in the past, you may be considering filing a second. If would like to have a second consumer proposal filed, call Loans Canada today to help you get in touch with a Licensed Insolvency Trustee to see if you qualify. If you do, they’ll be more than happy to help you get the process started.



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Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same. She's used a variety of financial tools over the years and is currently growing her money with Wealthsimple, while stashing some capital in a liquid high-interest savings account so that she always has a financial cushion to fall back on. She's also been avidly using her Aeroplan TD credit card to collect as many Aeroplan points as possible to put towards her travels!

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