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

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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, call us at 1-844-962-9200 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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The team at David Sklar and Associates Inc are very professional and are willing to help you get out of debt. Highly recommended.
Melissa MacKenzie
12:35 29 Mar 23
I would like to thank the team at David Sklar and associates inc. for all the time and effort they put in to support this process for me. This topic can be challenging to disclose but a big thank you to Christine for going above and beyond in guiding me through all my options and supporting me through the decisions. I cannot recommend this group enough , as they have shown me compassion , knowledge , and understanding throughout the entire process. I look forward to the next step of this process and learning how the proper way of becoming financially educated through the support of their financial counselling team. For anyone who is struggling , just know that there is a wonderful group of educated professionals at David Sklar who are available to help!
Michelle Plouffe
18:45 14 Mar 23
It took me awhile to get up the courage to contact David Sklar but I’m so glad I did. Trina walked through my options with me and provided the knowledge I needed to make a decision to help turn my financial situation around. She is patient and empathetic and answered any and every question that I had. Trina provided me the reassurance I needed that I was making the best decisions for me and my family. I’m so happy that I reached out and now have a plan to get back on track.
M. Mackenzie
19:59 12 Mar 23
Trina was very helpful and thorough.
Sam M
15:26 12 Mar 23
Christine was very helpful, kind, and understanding. She explained everything thoroughly, answered any questions I had, and was responsive to any concerns I had. 100% would recommend
Katherine Campbell
17:29 08 Mar 23
Jackie Stanley is excellent she took the time to explain everything to me and I am so grateful to her for giving me a fresh financial start so if you have any doubts don’t and go see her if you want to achieve financial freedom!
Heather Helfield
21:24 06 Mar 23
Amazing friendly staff that knows what they are going. They make a difficult situation not so bad. Would give 10 stars if I could.
alie Balan
22:37 25 Feb 23
Very helpful and kind and gave me all the available options before helping me decide which one was best for me. I would definitely recommend Jackie
Alison Rivard
01:01 21 Feb 23
Great experience i was in financial trouble and someone of my friends recommended this company. Cori is a wonderful and welcoming person she did a very good job and came up with a smooth and flexible monthly payment after the reduction. i highly recommend this company. Thank you David sklar and special thanks to Cori.❤️🙏🏻
Jasmine Joseph
22:08 13 Jan 23
Met up with Mr. Jason Sklar to discuss more in person, very thorough and clear. He is very kind and thoughtful, I will be referring anyone with the same situation to David Sklar & Associates.
Ariel Domingo
02:33 29 Dec 22
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