If you’ve already filed personal bankruptcy once in Ontario, it’s important to consider all your options before filing a second time.
Going bankrupt for a second time damages your credit for much longer than a first bankruptcy.
Anyone who files personal bankruptcy receives a R9 credit rating, which is the worst, regardless of whether it is their first or second time filing.
The difference is the length of time this rating stays on your credit bureau report:
First-time bankrupt: the R9 rating remains on the credit bureau report for 6 years after discharge
Second-time bankrupt: the R9 rating remains on the credit bureau report for 13 years after discharge
Depending on your income it can take a second-time bankrupt 24 or 36 months to become discharged.
What does that mean? From the start of the process, until the R9 rating is completely off of your record, it could take 15-16 years.
Since filing a second bankruptcy damages the credit rating for such a long time, we often try to help individuals avoid filing a second bankruptcy by making a consumer proposal.
A consumer proposal is a formal debt settlement under the Bankruptcy and Insolvency Act filed by a licensed trustee in bankruptcy. It allows you to:
- stop interest
- prevent creditor action
- compromise your debt
Most importantly? It allows you to avoid a second bankruptcy, plus it is far less damaging to your credit rating than a second bankruptcy.
Our Debt Options Calculator can show you the various options available to you, including a consumer proposal.