Can I File for Bankruptcy Twice in Canada?

When you’re drowning in debt, filing for bankruptcy once can feel like hitting the reset button. But what if life throws you another curveball? Can you file for bankruptcy twice in Canada? The short answer is yes — but the second time comes with tougher rules, longer timelines, and more serious consequences for your financial future.

The good news? You don’t have to figure this out on your own.

At Farber, our insolvency services are here to guide you through your options, whether that’s filing again or exploring alternatives like a consumer proposal.

Let’s break down what really happens if you file for bankruptcy twice and the paths you can take to rebuild with confidence.

What Happens When You File for Bankruptcy in Canada

How Bankruptcy Works

Think of bankruptcy as a legal “reset” button for unmanageable debt. Under Canadian law, it wipes out most unsecured debts (like credit cards and payday loans) so you can get a fresh start.

Once you file, a Licensed Insolvency Trustee (LIT) will deal with your creditors directly instead of you. Collection calls stop, wage garnishments end.

It’s not a free pass, you’ll need to complete certain duties like attending two credit counselling sessions, reporting your income, and making small monthly payments if required. But for many people, it provides the breathing room they’ve been desperate for.

First-Time Bankruptcy Timeline

For first-time filers, the road to discharge (that’s the official term for being released from your debts) is relatively short.

With no extra income, you can be discharged in as little as 9 months. If you earn above a certain threshold, the timeline extends to 21 months.

During that time, you’ll work with your trustee to stay on track. Once discharged, most of your unsecured debt is gone, and you can start rebuilding your finances.

Can You File for Bankruptcy Twice?

Here’s the straight answer: yes, you can file for bankruptcy more than once. But a second bankruptcy isn’t treated the same way as the first. It comes with stricter conditions, closer monitoring, and more serious long-term consequences.

Longer Time to Discharge

The biggest difference with a second bankruptcy is the timeline. Instead of 9 or 21 months, it typically takes 24 months (if you don’t have surplus income) or 36 months (if you do).

Just like a first bankruptcy, you’re entitled to an automatic discharge at the end of that period — as long as you’ve completed all required duties and no one opposes the discharge.

It’s only in a third bankruptcy that a discharge must be requested through a court hearing.

Impact on Credit Report

Your credit score also takes a harder hit. A first bankruptcy usually disappears from your credit report 6 to 7 years after discharge. But a second bankruptcy? That can stay on your file for 14 years. That means

lenders will see it for much of your financial life, making it harder to qualify for loans, mortgages, or even a rental lease in some cases.

What Happens If You File for Bankruptcy Twice

Filing for bankruptcy a second time doesn’t look the same as the first. Here’s what you can expect:

Difference in a Second Bankruptcy

The biggest change is the longer time frame. Instead of 9 or 21 months, a second bankruptcy typically lasts 24 months (without surplus income) or 36 months (with surplus income). That means more time spent fulfilling duties like monthly income reporting and budget reviews.

While creditor objections and discharge hearings can happen in any bankruptcy, they may be more likely in a second filing — especially if there are concerns about your financial conduct or compliance.

It’s not about punishment. It’s about showing that bankruptcy is still the right path forward — and that you’re committed to following through.

Repeat Bankruptcies Can Affect Creditor Trust

Getting discharged from a second bankruptcy doesn’t mean the road back is easy. Lenders tend to be more cautious, which can translate into higher interest rates, tighter limits, or the need to use secured credit cards at first.

It can feel slow and frustrating, but every on-time payment and responsible credit choice helps chip away at that doubt.

Over time, those small, steady steps are what rebuild confidence.

Alternatives to Filing for Bankruptcy Twice

Because a second bankruptcy has longer-lasting consequences, your LIT is obligated to explore other routes with you before going down that road.

Consumer Proposal

A consumer proposal is often the frequently used alternative. You negotiate with creditors (through your trustee) to pay back part of what you owe in affordable monthly payments.

The best part? You keep your assets, and your credit report only shows the proposal for 3 years after completion, not 14 years.

Debt Consolidation

Debt consolidation can also help. By rolling multiple debts into one payment — often with a lower interest rate — you can simplify your finances and get control without resorting to bankruptcy again.

Orderly Payment of Debt

In some provinces, there’s also something called an orderly payment of debt (OPD). It’s a court-approved plan that lets you repay your unsecured debts over time, with legal protection from creditors.

While it’s not available everywhere, it’s another option that keeps you from going through the harsh process of a second bankruptcy.

How to File for Bankruptcy with No Money

Worried you can’t afford to file? It’s a common concern.

Trustee Fee Structures

LITs understand that if you’re considering bankruptcy, money is already tight. That’s why many trustees spread their fees into manageable monthly installments, so cost isn’t a barrier to getting help.

Exploring No-Cost Initial Consultations

Here’s some relief: getting advice is free. At Farber, you can book a free consultation to go over your situation with a Licensed Insolvency Trustee. Whether you’re facing a second bankruptcy or exploring alternatives, you’ll get clarity without any upfront cost.

Taking the Right Next Step

A second bankruptcy is an option, but it’s not a decision to take lightly. The rules are tougher, the process is longer, and the impact on your financial future is more severe.

The good news is, you don’t have to figure this out on your own. Talking with a Licensed Insolvency Trustee is the safest way to explore your options.

At Farber, we’re here to guide you toward a decision that not only clears your debt but helps you move forward with confidence and peace of mind. Book your free consultation today.