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Dealing with debt can be tough, and it’s okay to feel a bit overwhelmed. If you’re considering a consumer proposal, or have already taken that step, it’s important to understand how it affects your credit.
At Harris & Partners, we’re here to walk you through this journey and arm you with all the information you need to make confident financial decisions. Let’s break down what a consumer proposal means for your credit report, and get you on your way to a stable future.
The Impact on Your Credit Report
When you file a consumer proposal, it shows up in two places on your credit report:
- In the Big Picture (Legal or Public Records Section): Think of this as the headline news on your report. The credit bureau gets a note about your consumer proposal – when you filed it and when you complete it. This is just a brief mention, but it’s there for anyone looking into your credit history to see.
- The Details (Credit Accounts Reporting): Each of your creditors will mark your account as ‘included in a proposal’, with an R7 rating. It’s not perfect (that’s R1), but it’s not as severe as bankruptcy (R9).
How Long Does it Stay on Your Credit Report?
As of 2019, here’s how the big credit bureaus, TransUnion and Equifax, handle your consumer proposal:
- TransUnion’s Policy: Your consumer proposal will leave your report three years after you’ve paid it off, or six years after you first missed a payment – whichever happens first.
- Equifax’s Take: They’ll remove the proposal from your report three years post-payment or six years from when you filed, depending on which comes first.
Why Choose a Consumer Proposal?
Deciding to go for a consumer proposal can be a smart move when you’re navigating through tough financial waters. Let’s talk about why it might be a good choice for you:
- A Lighter Debt Load: Pay off just a part of your debt, not the whole mountain. This means you can breathe a bit easier, knowing you’re handling what you can afford.
- No More Harassing Calls: Once you file a consumer proposal, those stressful calls and letters from creditors stop.
- Keeping Your Assets: Unlike bankruptcy, a consumer proposal often allows you to keep your assets – like your home or car.
- A Single Monthly Payment: Instead of juggling multiple bills, you make one manageable monthly payment.
- A Fresh Financial Start: Completing a consumer proposal is a step towards rebuilding your credit and financial stability. It’s not an overnight fix, but it’s a significant stride towards a brighter financial future.
What Should I Expect From a Consumer Proposal Process?
We understand if you’re feeling confused about the consumer proposal process, but we’ll be here to support you every step of the way. From your initial consultation to filing the documentation and negotiating with your creditors, you can count on our Licenced Insolvency Trustees to be there. Check out our short video below to see exactly what you can expect:
Take The First Step With Harris & Partners
Dealing with debt is a journey that’s different for everyone. We understand that it’s not easy, and that’s why our Licensed Insolvency Trustees are here to help.
Our team at Harris & Partners offers free, non-judgmental advice to guide you through these challenging times. Feel free to reach out to us for support and advice as you navigate your financial path to recovery. You’re not alone in this – let’s find a debt solution that works for you.
