Can You File Bankruptcy Twice in Canada?

How many times can you file bankruptcy in Canada?

There is no limit under the Bankruptcy and Insolvency Act. You can file a second, third, or fourth time as long as you have been discharged from the previous one. Each filing takes longer, costs more, and does more damage to your credit.

As of 2024, 20% of people who filed for insolvency in Canada had a previous bankruptcy on their record.

Source: Office of the Superintendent of Bankruptcy Canada – Canadian Consumer Debtor Profile 2024

How long does a second bankruptcy last?

A second bankruptcy lasts at least 24 months if you have no surplus income. If your net income exceeds the government threshold by more than $200 for your family size, the bankruptcy extends to 36 months.

Source: Office of the Superintendent of Bankruptcy Canada – Directive No. 11R2-2025, Surplus Income

First, second, and third bankruptcies compared

	First bankruptcy	Second bankruptcy	Third bankruptcy
Minimum duration (no surplus income)	9 months	24 months	Set by the court
Duration with surplus income	21 months	36 months	Set by the court
Minimum base cost	$1,800	$4,800	Set by the court
Discharge type	Automatic	Court approval	Court approval
Credit report impact	6 to 7 years	14 years	14 years

Source: Moses Advisory Group – How Much Does Bankruptcy Cost?

How surplus income extends a second bankruptcy

Surplus income is the amount your net household income exceeds the government threshold. You pay 50% of the excess each month. As of 2025, the threshold for a single person is $2,666 per month.

Source: Office of the Superintendent of Bankruptcy Canada – Directive No. 11R2-2025, Appendix A

How much does a second bankruptcy cost?

The minimum cost of a second bankruptcy is $4,800. That is $200 per month over 24 months, compared to $1,800 over 9 months for a first bankruptcy.

If surplus income applies, the cost rises quickly. A single person earning $3,500 per month after tax pays $417 per month in surplus income on top of the base contribution for 36 months, bringing the total above $22,000.

Do you need court approval for a second bankruptcy?

You do not get an automatic discharge from a second bankruptcy. Your Licensed Insolvency Trustee applies to the court, and a judge reviews whether you completed your duties, made all payments, and attended both counselling sessions.

A creditor can oppose your discharge if they believe you acted dishonestly or hid assets. A contested hearing adds months or years to the process, with no guaranteed end date.

How does a second bankruptcy affect your credit report?

A second bankruptcy stays on your credit report for 14 years after discharge with both Equifax and TransUnion. When you file a second bankruptcy, any previous bankruptcy that had been removed also reappears for 14 years, affecting your credit for decades.

Source: Financial Consumer Agency of Canada – How long information stays on your credit report

Frequently asked questions

Do I need a lawyer for a second bankruptcy?

You do not need a lawyer. You do need a Licensed Insolvency Trustee, who handles the paperwork, communicates with creditors, and applies to the court for your discharge. A lawyer can help if a creditor opposes your discharge at the hearing.

Can I keep my house during a second bankruptcy?

It depends on your equity. If your house is worth more than you owe on the mortgage, the trustee may seize it or require you to pay the equity amount. Exemption limits vary by province.

What debts are not cleared by a second bankruptcy?

Student loans less than 7 years old, child support, spousal support, court fines, and debts from fraud survive both first and second bankruptcies.

Can creditors still contact me during a second bankruptcy?

No. Once you file, a stay of proceedings takes effect, and creditors must stop all collection activity. Give any creditor who contacts you your trustee’s name and file number.

Can I file a consumer proposal instead of a second bankruptcy?

Yes. A consumer proposal does not require court approval. Your payments are fixed, there is no surplus income formula, and a consumer proposal stays on your credit report for 3 years after completion or 6 years from filing, whichever comes first.

What happens if I default on a second bankruptcy?

Your trustee can request that the bankruptcy be annulled, which completely cancels it. As a result, your debts reappear, and creditors can sue you, garnish your wages, or seize your assets.