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?

The best decision I've made was to contact David Sklar & Associates, they are experts in this matters and also have dedicated Licensed Counsellors that provide the best customer support, like Rhoda Lewis, who I highly recommend. She worked tirelessly on my case, explaining ever detail to me willingly. She demonstrates a true interest in her clients. I appreciate how she patiently walked me through what to do, step by step. I now have control over my finances, as a result my life is much more peaceful and I can focus on what matters. Thank you!
Nilda H.
20:18 16 Jun 22
Very helpful and friendly! I am more than satisfied with my experience here. And more than happy with the outcome! Would definitely recommend .
Peggy Bulger
15:10 14 Jun 22
Jerry at David SKLAR helped me thoroughly understand my options and made me feel at ease. If you are looking at this type of service/help, I 100% recommend you give them a call.
Colleen H
12:50 14 Jun 22
Rhoda is a wonderful person, She help me and guided me throughout the process. I couldn’t do it without her support and expertise. Now I can start fresh and full of hope of a better life ahead of me.
ariezel erandio
21:33 06 Jun 22
The service I recieved from David Sklar and Associates was great. I was able to meet with Christin Sylver. She is kind, understanding and, professional. She was able to answer all the quesions that I had regarding my debt. At the end of our meetings, I felt that there is a heavy burden lifted from my shoulders. I recommend Chistine to anyone who is looking into debt relief.
Aliya H
12:11 04 Jun 22
Jerry is a very patient person, he answered all my questions and made this experience so smooth and easy for me. I was not sure what to expect but dealing with him made me feel so much better. He sure knows what he is doing and how to put people at ease for sure (should have done this long ago). I recommend him to anyone I am so glad I had him on my side and now to do my part. Thanks Jerry ur greatPattie
Patty Murphy
21:34 18 May 22
Rhoda Lewis helped me achieve a fresh start two and half years ago! She was very professional with a very warm, caring personality! I emailed her today with a question and she responded quickly. She's great at her chosen profession!!
Debbie Livingston
01:24 11 May 22
Nothing but good things to say about Jackie. She was so nice and so understand and everything was so quick and easy. In a matter of a week, there was the solution that I never thought was possible. Thank you so very much for everything that you have done. ❤️❤️❤️
Cassandra Keenan
21:05 10 May 22
I was in a lot of debt and stress, Jackie Stanley with David Sklar & Associates was very professional, and extremely helpful with getting out of debt. I should of did this sooner, they take the all the weight and stress of a persons shoulders, amazing team at David Sklar & Associates!!
Hubert Z
03:08 10 May 22
Jackie helped me out during a really tough time and she made the entire process very easy and painless. I highly recommend reaching out to her if you find yourself in any financial trouble. You won’t be disappointed!
prettylush 13
02:42 10 May 22
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