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 filing.

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?

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
My experience with Ashley Carter at David Sklar and Associates was very pleasant and professional. The process was made easy by Ashley with her help in answering my questions and concerns.
Alex Lamparter
13:07 03 Sep 21
Ashley she was extremely helpful,super friendly and understanding my situation. I am very please for the service I received and I will recommend this Company to anyone in need of consolidating. Thanks so so much.
Nicole Minister
17:43 02 Sep 21
I finally pulled the trigger and seek help from this team. I tried to pay my debt in the way it should be until the pandemic made it even worst and couldn't keep up with my payments anymore. Jackie is an amazing person, I told her the problem, she gave me the solution and gave me a variety of options and walked me through the process. That simple. Thank you so much.
rr 28
12:44 21 Aug 21
Dealing with Jackie made the process so much more comfortable. From my first phone call with her I never felt like I was being looked down on. Jackie made this as easy as being in this situation could be.
Vi Smith
18:09 13 Aug 21
I have to say, I never thought that such process could have been so quick and easy. But then again I guess that's what happens when you deal with professionals. I dealt personally with Rodha Lewis, who was very attentive to my personal issue and very professional on her work. She's someone who will actually take her take and talk to you about the process and help you as much as she can. I am very grateful to her and very appreciative of her work. I couldn't have dealt with someone better. Thank you very much Rodha for your work.
fidel Cruz
14:35 24 Jun 21
I just completed my proposal and I am thrilled. Rhoda was delightful to work with. She helped me end the phone calls and start rebuilding my life. I highly recommend the services here and will always recommend to anyone who asks. Definitely seek out their services if you are in need of some help.
Maria Curbelo
13:43 23 Jun 21
Very professional and fast service! Also, personable!.. they don't treat you like a number, but like a person.From the time I first contacted them, until I was set up there has been not more than 7 days.I dealt with Jackie, she was great!
Jelena Petrovic
18:06 20 Jun 21
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