How long does a bankruptcy last?

The length of the bankruptcy depends on a few factors – whether you have ‘surplus income’ (see below) and whether you have been bankrupt before. If you have no surplus income and have never been bankrupt before, you will be eligible for an automatic discharge after nine months.

How long does the Consumer Proposal last?

A Consumer Proposal must be completed within 5 years. Usually the payments are monthly (over 60 months), but a Consumer Proposal can also include a lump sum payment, or a combination of the two. If your finances allow, you can pay it off sooner than the agreed-upon payment schedule lays out.

What is a bankruptcy?

A bankruptcy is a legal process to discharge your debts. It is a declaration that your debts are too high for you to repay – and far better than the old concept of a ‘debtor’s prison’! It allows for a fresh start, while giving your creditors some return on what’s owed only if you have a level of income that allows for payments to be made to them, or unprotected assets that can be liquidated (however, most common assets are protected during this process – see below for more information on protected personal assets).

What is a Consumer Proposal?

A Consumer Proposal is an offer to your creditors to pay back a percentage of what you owe them, based on your ability to pay. It is governed by the Bankruptcy and Insolvency Act, administered by a Licensed Insolvency Trustee. Unlike other negotiated debt settlement plans, it is legally binding on all creditors and usually involves paying back less than the total amount of your debt.

What is a Licensed Insolvency Trustee (LIT)?

Licensed Insolvency Trustees (LITs) are federally regulated professionals who provide advice and services to individuals and businesses to reorganize and resolve financial difficulties with expertise and compassion. LITs help individuals or businesses make informed choices to deal with their financial difficulties. They are the only professionals able to administer bankruptcies or proposals.

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

If you’re considering a consumer proposal, you may be wondering how it will affect your credit. Will you qualify for a credit card again? What about buying a home or financing a vehicle? And how long will a consumer proposal stay on your credit report?

In Canada, a consumer proposal generally stays on your credit report for three years after completion or six years from the date you filed, whichever comes first.

While a consumer proposal affects your credit, the impact isn’t permanent. For many people, resolving overwhelming debt is the first step toward rebuilding financial stability.

Here’s what you need to know about how consumer proposals affect your credit report and what to expect moving forward.

How Long Does a Consumer Proposal Stay on Your Credit Report?

A consumer proposal is a legally binding debt relief option that allows you to repay a portion of your unsecured debt through an agreement with your creditors. It is administered by a Licensed Insolvency Trustee (LIT).

When you file a consumer proposal, it becomes part of your credit history and is reported to Canada’s two major credit bureaus, Equifax and TransUnion.

A consumer proposal generally remains on your credit report for:

Three years after completing your consumer proposal, or
Six years from the date you originally filed

Whichever date comes first determines when the consumer proposal should be removed.

For example, if you file a consumer proposal in January 2026 and complete your payments in January 2029, the proposal would generally be removed in January 2032.

If you take the full five years to complete your proposal, it would typically be removed six years after your original filing date.

Does Equifax or TransUnion Keep a Consumer Proposal Longer?

Equifax and TransUnion generally follow the same reporting timeline for consumer proposals. However, your credit reports may not update at exactly the same time.

After completing your proposal, review both reports to make sure the filing and completion dates are accurate.

Understanding how credit reports and credit scores work in Canada can help you identify what lenders see when reviewing your financial history.

How Does a Consumer Proposal Affect Your Credit Score?

Filing a consumer proposal negatively affects your credit rating, although the impact varies depending on your financial history.

By the time many people consider debt relief, their credit has already been affected by missed payments, high balances, or collection activity.

A consumer proposal doesn’t erase that history immediately. Instead, it provides a structured way to address qualifying unsecured debts and begin rebuilding financial stability.

What Does an R7 Credit Rating Mean?

When you file a consumer proposal, accounts included in the proposal are generally assigned an R7 rating on your credit report.

An R7 rating indicates that you’re repaying debt through a special arrangement rather than following the original repayment terms.

For comparison:

R1: An account paid as agreed and on time.
R7: An account being repaid through a special arrangement.
R9: A more severe rating associated with bankruptcy or certain bad debts.

An R7 rating can make qualifying for new credit more difficult, but it doesn’t mean you will never qualify again.

How Many Points Will Your Credit Score Drop?

There is no exact number of points everyone loses after filing a consumer proposal.

Your credit score depends on several factors, including payment history, outstanding balances, credit utilization, and existing credit accounts.

Someone with several missed payments may experience a different change than someone who previously maintained a strong credit score.

While protecting your credit is important, addressing unmanageable debt can provide greater long-term financial stability.

Does Paying Off a Consumer Proposal Early Remove It From Your Credit Report?

Paying off a consumer proposal early doesn’t immediately remove it from your credit report. However, completing your payments sooner can move the three-year reporting timeline forward.

For example, if you file in January 2026 and complete your proposal in January 2028, the notation would generally be removed in January 2031.

It’s important to balance early repayment with other financial priorities. Using all your savings to finish a proposal sooner may not be the best decision if it leaves you without money for unexpected expenses.

A Licensed Insolvency Trustee can help you understand whether early repayment makes sense for your situation.

Can You Remove a Consumer Proposal From Your Credit Report Early?

Generally, an accurately reported consumer proposal cannot be removed before the applicable reporting period ends.

Even after completing your payments, the notation may remain visible until the three-year or six-year reporting period expires.

However, you can dispute inaccurate information on your credit report.

What If Your Consumer Proposal Is Still on Your Credit Report?

If your consumer proposal remains on your report beyond the applicable reporting period, review your filing date, completion date, and account information with Equifax and TransUnion.

You may need to provide supporting documentation, such as your certificate of full performance, to correct an error.

Keep in mind that individual accounts may have separate reporting timelines, even after the consumer proposal notation disappears.

Can You Get Credit While a Consumer Proposal Is on Your Credit Report?

Yes, it may be possible to qualify for certain types of credit while a consumer proposal is still on your report.

However, approval isn’t guaranteed, and your borrowing options may be more limited.

Can You Get a Credit Card After a Consumer Proposal?

A secured credit card is one option for rebuilding credit during or after a consumer proposal.

Unlike a traditional credit card, a secured card requires a deposit that generally determines your credit limit.

By making small purchases and paying your balance on time, you can begin establishing a positive payment history, provided the issuer reports your activity to the credit bureaus.

The goal isn’t to take on more debt. It’s to demonstrate that you can manage credit responsibly.

Can You Get a Mortgage or Car Loan After a Consumer Proposal?

A consumer proposal doesn’t automatically prevent you from qualifying for a mortgage or vehicle financing.

However, lenders may require a larger down payment, charge higher interest rates, or apply stricter approval requirements.

Your eligibility will depend on your credit history, income, existing obligations, and whether your proposal is active or completed.

Before applying, make sure any new payments realistically fit your budget.

What Happens to Your Credit After a Consumer Proposal Is Removed?

Once a consumer proposal is removed from your credit report, lenders will no longer see that particular notation.

However, your credit score doesn’t automatically return to what it was before your financial difficulties.

Your score will continue to reflect your payment history, outstanding balances, and current credit activity.

This is why rebuilding credit should begin before the consumer proposal disappears.

Making payments on time, keeping balances manageable, following a realistic budget, and monitoring your credit reports can all support your financial recovery.

For more practical strategies, read our guide on how to rebuild your credit score after a consumer proposal or bankruptcy.

Is a Consumer Proposal Worth the Impact on Your Credit?

A consumer proposal affects your credit report, but that doesn’t necessarily mean it’s the wrong financial decision.

For someone struggling with overwhelming unsecured debt, continuing to make minimum payments while interest charges accumulate can make it difficult to regain financial stability.

A consumer proposal may allow you to reduce qualifying unsecured debt, stop interest charges on included debts, and make fixed payments over a period of up to five years.

It can also provide legal protection from collection activity by affected creditors while allowing you to keep important assets, provided you continue meeting secured debt obligations.

Every financial situation is different. The right solution depends on your income, assets, debt obligations, and long-term goals.

Your Financial Future Goes Beyond Your Credit Score

A consumer proposal may temporarily affect your credit, but it doesn’t have to define your financial future. Understanding how long it stays on your credit report can help you plan your next steps and begin rebuilding with confidence.

At Campbell Saunders Ltd., we’ve helped British Columbians navigate financial challenges for more than 40 years. Our Licensed Insolvency Trustees provide practical, confidential guidance to help you understand your options and find a realistic path forward.

Schedule a free confidential consultation to discuss your financial situation and explore your next steps.