16 October 2023
Safe, secure & confidential
Key Points
A consumer proposal will indeed impact your credit rating, but not as severely as a Bankruptcy. While both choices can make it more challenging to secure credit, a Consumer Proposal remains on your record for just three years after your final payment.
When you file a consumer proposal, your credit report will reflect this in two ways.
First, the Office of the Superintendent of Bankruptcy will notify the credit bureau about your consumer proposal, resulting in a note in the legal or public records section of your credit report. This note will specify the type of proceeding (a consumer proposal) and the filing date. Once you complete your proposal, this information is updated to include the completion date. We’ll explain below how long this notice stays on your report.
Second, individual creditors will report that the account was ‘included in a proposal.’ This debt will be labeled as an R7, indicating that you’ve arranged to settle your debts with creditors. For reference, an R1 denotes a perfect credit rating, while an R9 represents bankruptcy. Therefore, a consumer proposal is generally seen as slightly better than bankruptcy. Typically, account information is removed from your credit report six years after the last activity date, which can be the last payment date or the filing date, depending on the creditor. In some cases, creditors may incorrectly label your account as ‘included in a bankruptcy,’ but the correct legal proceeding will appear in the public records or legal section.
Low credit can present unexpected challenges, as it categorizes you as a high-risk borrower. This high-risk status often leads to lenders rejecting your loan applications. When you do manage to secure credit, it tends to come with high-interest rates since lenders are hesitant to offer favorable rates to individuals with poor credit scores. Additionally, your credit history may even impact your job prospects, especially if potential employers request permission to review your credit background.
The duration for which a consumer proposal remains on your credit report in Canada has been updated by both TransUnion and Equifax, as of 2019. Here’s the latest information:
To simplify, under these new guidelines:
For those who opt for a lump sum proposal, the notice will typically be removed in approximately three years, contingent upon attending two counseling sessions to obtain your certificate of completion.
Embarking on the path to financial recovery begins with your initial contact for debt help.
Dealing with debt complexities can be daunting, and determining if a consumer proposal aligns with your situation can be challenging. Therefore, it is strongly recommended to seek guidance from a licensed insolvency trustee.
For a consultation regarding consumer proposals in Canada, get in touch with one of our licensed insolvency trustees at Harris & Partners Inc. today by dialing 1-800-268-8093.
Read more
October 24th, 2023
When filing a Consumer Proposal, you propose to pay a portion of the debt that you owe over a specific period of time. One common question that many have is what does a Consumer Proposal look like?
Read more
October 16th, 2023
A consumer proposal will indeed impact your credit rating, but not as severely as a Bankruptcy. While both choices can make it more challenging to secure credit, a Consumer Proposal remains on your record for just three years after your final payment.
Read more
October 13th, 2023
In this article, we’ll discuss how a consumer proposal can influence your current home and mortgage prospects.
Read more
October 12th, 2023
Almost half of all Canadians find themselves with less than $200 to spare by the end of the month, leaving them vulnerable to financial challenges. In today’s uncertain economic climate, unexpected expenses can easily push you into debt, leaving you uncertain about your next steps.
You might be burdened by debt, but you could also have valuable assets you wish to protect. Concerns about the long-term repercussions of bankruptcy may be on your mind. Fortunately, there’s an alternative solution – a Consumer Proposal, which can offer you a fresh financial start.
If you’re grappling with financial stress and struggling with payments, seeking guidance from a Licensed Insolvency Trustee at Harris & Partners is a wise step. They can help you explore options and propose a debt repayment plan to your creditors. Harris & Partners provides expert assistance and complimentary debt counseling to assist you in regaining financial control.
Read more
October 11th, 2023
Immigration and Its Impact on Bankruptcy and Consumer Proposals in Canada Canada is known for its welcoming stance on immigration, […]
Read more
October 10th, 2023
Constant calls from creditors are a sign that your debts are piling up and need to be dealt with. Creditors are required by law to stop collection actions once you file a consumer proposal or bankruptcy. If you have money worries and can’t make payments, it’s in your best interest to meet with your Licensed Insolvency Trustee (previously known as a Trustee in Bankruptcy), at Harris & Partners. This will help you to understand your options and present your creditors with a solution for the payment of your debt. Harris & Partners provides expert advice and free debt counselling to help you begin getting control of your finances.
Read more
October 10th, 2023
Many individuals enter into a business partnership in the hopes that joining forces with another person will create a better client base, bring a more various set of skills to the table, and generally help business boom. Agreeing to a partnership means sharing not only in profits and success, but also in losses and debts. What can you do when your partner declares personal bankruptcy? How does this put you at risk?
Read more
October 10th, 2023
Filing for bankruptcy can be a scary time for anyone. There are many different legal requirements depending on which province you live in, and then there are the questions you’ll have:
Read more
October 10th, 2023
It’s rare to find someone who doesn’t have some form of debt these days, but it’s when that debt gets to the point where you are struggling to pay it that you need to take action.
Read more
October 10th, 2023
Do you have significant tax debts? If the answer is ‘Yes’ or even if you are just concerned with the state of your finances it is beneficial to book a free consultation with a Licensed Insolvency Trustee (previously known as a Trustee in Bankruptcy). When you meet with a Trustee you will need to provide information on your income and expenses, including net monthly take home income and proof of income as well as information about the value of your assets and a list of your debts.
