How Many Times Can You Make a Consumer Proposal?
Posted on: October 10, 2025Posted in Consumer Proposals | Comments Off on How Many Times Can You Make a Consumer Proposal?
If you’re struggling with debt and looking for sustainable relief, a consumer proposal in Canada may be one of the most effective solutions available. But what happens if you’ve already gone through this process? Can you do it again? Is there a limit on how many times you can renegotiate your debts under federal law?
The good news is: you can file again under certain conditions—but it’s crucial to understand the legal framework and the implications of doing so. It’s important to know what the law allows, what your obligations are, and how repeating a structured repayment agreement might impact your credit and financial future.
Talking to a Licensed Insolvency Trustee (LIT) is essential before making any decisions. A LIT is the only professional authorized to administer these federally regulated arrangements in Canada and can provide legal guidance tailored to your specific situation.
What Is a Consumer Proposal?
It is a legally binding agreement between you and your creditors, administered by a Licensed Insolvency Trustee (LIT). It allows you to repay a portion of your unsecured debts over a period of up to five years—often with reduced interest and protection from further collection actions.
Unlike bankruptcy, this federally regulated alternative lets you keep your assets, making it a preferred option for many Canadians seeking structured debt relief.
To qualify, you must owe less than $250,000 (excluding your mortgage) and be unable to repay your debts in full. Once filed, a stay of proceedings protects you from wage garnishments, lawsuits, and creditor harassment. Your LIT will guide you through the process, helping you build a realistic repayment plan that meets legal standards and satisfies creditor expectations.
Can You File More Than One Agreement?
Yes, filing multiple consumer proposals over your lifetime is allowed. Canadian insolvency law does not limit the number of times an individual can enter into a formal repayment arrangement with creditors through a Licensed Insolvency Trustee. However, each filing must be based on a genuine financial need, approved by your creditors, and administered by a LIT.
Repeat filings are often triggered by:
- Job loss or reduced income
- Medical emergencies or unexpected expenses
- Business failure or personal guarantees
- Divorce or family restructuring
If your financial situation has changed significantly since your last proposal, a second filing may be a viable way to avoid bankruptcy and regain control of your finances.
However, you must complete or annul your current repayment arrangement before initiating a new one. You cannot have two concurrent consumer proposals. This rule ensures that creditors are dealing with a single structured repayment plan and that your obligations are clearly defined.
Before filing again, it’s essential to speak with a Licensed Insolvency Trustee, who can help you assess whether a repeat consumer proposal is appropriate — or if other debt relief options in Canada may be more effective.
Legal Considerations for Filing Multiple Consumer Proposals
While the law allows repeat filings, there are important legal and practical factors to consider:
- Completion of a Previous Agreement
If you successfully completed a prior repayment arrangement, you’re eligible to file again if new financial difficulties arise. Creditors may view your past completion positively, as it reflects financial responsibility and commitment. - Annulled or Rejected Filing
If your earlier plan was annulled—typically due to missed payments—or rejected by creditors, filing again may be more challenging. You may need to demonstrate improved financial circumstances or offer more favorable terms to gain creditor acceptance. - Court Approval for Consumer Proposal
If you’re attempting to file a second agreement on the same debts after a failed first attempt, you may need court approval for consumer proposal. This adds complexity and may require legal representation or additional documentation. - Creditor Review
Each plan is subject to careful review by your lenders. If you’ve filed multiple times, creditors may examine your financial history more closely. A Licensed Insolvency Trustee can help you craft a realistic and appealing arrangement that addresses creditor concerns and meets legal standards.
Can You File Another While Still Paying One Off?
This is one of the most common questions individuals ask when facing renewed financial hardship. The short answer is no — you cannot file a new consumer proposal while another one is still active.
There’s no limit, but you cannot have two concurrent consumer proposals. Finish one before you start another.
Legally, there’s no limit to how many times you can enter into a formal and legally binding debt settlement agreement in Canada. You can submit a second, third, or more if needed. However, while there’s no cap on repeat filings, Canadian insolvency law requires that your current agreement be completed, annulled, or otherwise resolved before starting a new one. Only one legally binding arrangement with your creditors can be active at any given time.
If you’re still making payments on an existing plan and run into new financial trouble, a Licensed Insolvency Trustee (LIT) can help. Depending on your situation, options may include amending the terms, negotiating a new repayment structure, or—if necessary—filing for bankruptcy.
In some cases, if you’ve already filed for bankruptcy, you may be able to file a consumer proposal to annul that bankruptcy—but only if it’s accepted by your creditors and approved by the court. This process, known as a bankruptcy annulment via consumer proposal, is legally permitted under Canadian insolvency law, but it is complex. A LIT can guide you through the legal steps and help you decide which arrangement is the right choice.
How Long Should You Wait Before Filing Another?
There is no legally mandated waiting period between completing one consumer proposal and filing another. You may file again once your previous proposal is completed, annulled, or discharged.
However, many individuals choose to wait until they’ve regained financial stability, which can improve the likelihood of approval and successful completion.
Your Licensed Insolvency Trustee (LIT) will assess whether the timing is appropriate and confirm your eligibility to proceed.
Practical Implications of Filing Again
- Credit Impact
Each consumer proposal affects your credit score. While the impact is generally less severe than bankruptcy, repeat filings can extend the time you spend in below-average credit status. That said, completing your agreement and rebuilding credit responsibly can help reduce long-term effects. - Cost and Duration
Subsequent filings may involve different repayment terms depending on your current income, assets, and overall debt load. Your Licensed Insolvency Trustee will assess your financial situation and recommend a plan that’s both feasible and fair. - Bankruptcy as an Option
If you’ve already filed a consumer proposal and find yourself in financial trouble again, you may also consider bankruptcy. However, bankruptcy comes with stricter consequences, including possible loss of assets and a longer time for credit recovery. For those who qualify, this type of structured repayment plan is often a more flexible and less disruptive alternative.
Before making any decisions, it’s wise to consult a Licensed Insolvency Trustee, who can walk you through the pros and cons of each option and help you choose the most sustainable path forward.
Alternatives to Repeat Filings
If you’re not eligible or advised against filing another, here are some other options for debt relief in Canada you can explore:
- Debt consolidation loans
- Credit counselling
- Debt management plans (DMPs)
- Personal bankruptcy
- Informal debt settlements, also known as voluntary debt arrangements
Discussing these alternatives with a Licensed Insolvency Trustee ensures that you choose the solution best aligned with your financial goals and legal standing.
Conclusion
In Canada, the law recognizes that financial hardship can strike more than once. If you’re facing overwhelming debt again after already filing a consumer proposal, you’re not alone. Life can be unpredictable, and setbacks happen. Fortunately, the law in Canada does allow for filing multiple consumer proposals, provided the previous one has been resolved.
Working with a Licensed Insolvency Trustee ensures that your repayment plan is legally sound, strategically structured, and tailored to your current financial situation. If you’re facing debt challenges, don’t hesitate to explore your options. A second consumer proposal could be the best route for you to take to restore your financial stability and peace of mind—with your LIT’s expert guidance every step of the way.
You Deserve a Fresh Start—Let’s Take the First Step Together
If you’re feeling overwhelmed by debt, you’re not alone—and you don’t have to face it alone. Speak with one of our Licensed Insolvency Trustees today for a free, confidential consultation. Let’s find the right solution for your financial future, together.
