How Long Does a Consumer Proposal Stay on Credit Report in Ontario?

Does a Consumer Proposal Affect My Credit?

The short answer is yes; a consumer proposal will affect your credit as it reduces your credit score and stays on your credit report for a period.

After completing the proposal, however, nothing is stopping you from raising your credit score.

Many are concerned about the impact a consumer proposal can have on your credit. The reality is that this debt relief solution can set you up for better credit and financial decisions in the future. One reason for this is that credit counselling services are mandatory with a credit consumer proposal.

Credit counselling sessions provide a debtor with the tools, resources, and debt management strategies they will need to repay the proposal and form better financial habits for the future. 

At David Sklar & Associates, we want to see you succeed and walk you through the entire process. We will explain what filing for a consumer proposal will mean for your credit and how it can help your financial future. 

How Long Does a Consumer Proposal Stay on Your Credit Report?

A consumer proposal can remain on your credit report a maximum of 6 years from the date you file based on the new guidelines from TransUnion and Equifax. A lot less time than bankruptcy. Bankruptcies, on the other hand, remain on your account for longer, and increases every time you file one.

Keep in mind that if you pay your consumer proposal faster, the length of time it appears on your credit report is shortened. This is another advantage that you don’t get when you file for bankruptcy. At David Sklar & Associates, we work with you to weigh both options and identify the best solution for you.

A consumer proposal that is completed in five years, will be removed from your credit report one year later (six years from the date you filed).

A consumer proposal that is completed in two years, will remain on your credit report an additional 3 years from the date you completed payment (for a total of five years).

A consumer proposal paid immediately as a lump sum, will be removed three years after the completion of the proposal.

How Long Does Bankruptcy Stay on Credit Report in Canada?

How long a bankruptcy will stay on your credit report in Canada depends on the number of bankruptcies you’ve already filed. If this is your first bankruptcy, it will remain on your credit for six years after discharge.

If this is your second time filing for bankruptcy, it will stay on your credit report for 14 years. If you file for bankruptcy three times or more, it remains on your credit for life. The Canadian Government outlines these timelines.

Understanding Your Credit Rating History

The two agencies that report and keep a record of your credit history are TransUnion and Equifax. These agencies updated their retention policies for consumer proposals in 2019 to reflect the following:

TransUnion: TransUnion will remove a consumer proposal and any related accounts from your credit history after either a) three years after completing the proposal b) six years since the defaulting of the account. Whichever comes first will be applied.  

Equifax: Equifax will remove a consumer proposal from your report three years after you pay all debt or six years after filing the request. Whichever comes first will be applied.

How Does a Consumer Proposal Affect Your Credit?

There are various ways a consumer proposal can affect your credit. That said, keep in mind that these implications are only temporary.

When your consumer proposal is filed and approved, the Office of the Superintendent of Bankruptcy will obtain it and inform the credit bureau. This action will result in several things. 

  • You will likely receive either an R7 credit rating (keep in mind that if you don’t make your payments, this will also occur). Bankruptcy, on the other hand, results in an R9 score
  • The proposal will show up on two sections of your credit rating for three years (the legal and/or public records section of your credit report).
  • Each creditor will indicate that your account was included in a proposal 
  • The date of the filing is recorded and then updated upon completion. 
  • On occasion, your creditors may indicate a bankruptcy on your credit report instead of a proposal. You can request an update to rectify this.

These implications are removed once your consumer proposal is completed, leaving you with a fresh slate to rebuild your credit and achieve financial wellness. The sooner you complete the proposal, the sooner you can start rebuilding.

Rebuilding Your Credit

There are various ways to rebuild your credit after filing a consumer proposal. This includes:

  • Applying for a Secured Credit Card
  • Making sure you repay everything on time 
  • Paying in larger amounts when you can; not just the minimum
  • Avoiding opening new accounts before current ones are paid

Filing Consumer Proposals with David Sklar & Associates 

The hardest part of the consumer proposal process is asking for help. The team of compassionate Licensed Insolvency Trustees at David Sklar & Associates will guide you throughout the process, help you weigh your options, and make suggestions based on your unique situation. 

There is no one size fits all debt relief solution, and our compassionate trustees work with you to identify the solution that will be best suited to you so that you achieve financial independence as soon as possible. 

We provide the credit counselling required to file a proposal and establish debt management and financial plans for your future. Contact David Sklar & Associates to book your initial consultation.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt and live in the Toronto area, call us at 416-498-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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Ready to live debt free?

I cannot emphasize enough how thankful I am for Jackie Stanley's help with filing for bankruptcy.All of us dread being put in this position and we have a million questions about the process but trust me Jackie makes it so easy for you that you don't have to do anything yourself!She is very kind and friendly and puts you at ease right away. She emphasizes with you and let's you know it's not your fault.Most importantly when you leave that first meeting you will not believe the load that is taken off your shoulders. You can actually feel it!You are a godsend Jackie and I can't thank you enough!!I hope you are highly valued there as much as you are by me!
Sue Murray
18:45 05 Dec 21
Putting together and executing a Consumer Proposal can be daunting, that is unless you work with Cori Naron at David Sklar & Associates Inc. Cori's advice and support has been instrumental over the past five years. Thank you Cori!!
Barry Kuntz
20:37 01 Dec 21
I’m very happy with the services I received for Jackie Stanley who helped me get my finances in order. It was a quick and easy process & all of my questions were answered.
Amanda Frappier
01:18 19 Nov 21
I have had the privilege of being supported by Jackie at David Sklar Associate. She was very helpful, very professional and very friendly. She gave me the help I need. Thank you Jackie for your help.
Alex Taylor
22:03 17 Nov 21
Got my probe solved, great service
arny raposo
17:02 11 Nov 21
Jackie at Daivid Sklar and Associates is such a pleasure to work with. She explained everything in great detail and is always there when I have a question or concern. She really cares about her clients.
Steve Medica
09:33 10 Nov 21
I filed a proposal with another group, which came in as a referral from one of my brokers. My experience went from ok to bad to worse, due to lack of communication and education on the process I was to embark on. I worked with Cori Naron in the past, and I came to her now for help on literally doing the work that the other group should have done. Cori stepped in, educated me, advised on rights, responsibilities, how the process works and what potential outcomes may happen. I do not have enough words of recognition and gratitude for what she did - she alleviated stress, anxiety, dead-end thoughts and she made me live again. Congrats to DSklar for hiring her and retaining such talent.
Giani Kokolakis
18:45 25 Oct 21
Very professional service. Before contacting David Sklar & Associates i contacted bunch of other firms they seemed fishy. After I spoke with Jason Sklar at Hamilton Office I discovered professionalism with hope. I was explained every step of my situation with solution professionally. Thank you David Sklar & Associates.
Wajay Awan
07:29 12 Oct 21
I met David a few months ago and i am glad I did. He has helped me all the way through my bankruptcy with good advice and explained every step of the process. David is a very down to earth and very professional. Anytime I've had a question I was able to reach out to David by phone or email and he always got back to me. If your struggling with your bills and need a way to get help, I strongly recommend David Sklar &Associates to help you. My experience with them on 1-5scale would be a 5;; My life is so much better now, thanks to David Sklar.
Bruce Locke
16:13 08 Oct 21
I have had the privilege of being supported by Jackie S, at David Sklar n Associate.She was helpful, professional and friendly. I was able to get the help I needed at a difficult time in my life. I would recommend anyone who needs support with working out their debts to ask for Jackie, she will be waiting to assist however she can to help you through your debts. She works with a team who is always ready and responsive.Thank you Jackie and your team:)
Denise Simpson
15:17 09 Sep 21
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