How Long Does a Consumer Proposal Stay on a Credit Report

How Long Does a Consumer Proposal Stay on a Credit Report

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By Bromwich+Smith Staff | 973 words | Reading Time: 4 minutes, 21 Seconds | Date: 2022/01/20

First of all what is a consumer proposal? It is a legally binding agreement between you and your creditors to pay a reduced amount of the debts you owe within five years. Because of its legally binding nature, a consumer proposal must be administered by a Licensed Insolvency Trustee, according to the rules governed by the Bankruptcy and Insolvency Act of Canada.

A consumer proposal can be an excellent solution to conquering your debt but it does impact your credit rating. However, it is removed from your Equifax and TransUnion credit reports, 3 years after you've paid off all your debts according to the proposal, or 6 years from the date it was filed, whichever comes first. 


Defining a Credit Rating

A credit rating is an estimate of how well a person meets their financial commitments, according to their payment history and current debt status.

Equifax, one of Canada’s largest credit bureaus, measures your credit score on a scale of R1 to R9. An R1 rating means you make payments on time, whereas an R9 means you have declared bankruptcy. To be more specific you will have an R1 credit rating as long as your payments are always made and are within 30 days of your billing and you have missed no more than one late payment. An R9 is considered a bad debt, a debt being placed with a collection agency, and bankruptcy. If you have filed a consumer proposal, you will have an R7 rating— which reflects debts to be paid at the end of a debt consolidation loan, or voluntary deposit at Court, or any other similar arrangement, such as a consumer proposal.


How Long Will a Consumer Proposal Stay on my Credit Record?

Equifax and TransUnion have determined that it takes three years for a consumer proposal to be taken off your credit score after your last payment. That means the faster you fulfill the expectations of the consumer proposal and pay it off, the sooner you can start to rebuild your credit rating.

Is a Consumer Proposal Right for me?

A Licensed Insolvency Trustee can help you decide if a consumer proposal is the ideal fit for your financial situation. In the meantime, please find the benefits of a consumer proposal below.

Consumer Proposal Benefits:

  • Settle your debt based on what you can afford, not what creditors were demanding.
  • Stops all creditor actions, including collection calls and wage garnishees.
  • Legally force creditors into the settlement, even if they don’t all agree.
  • Stop interest charges immediately.
  • Paid through one monthly payment, with up to 5 years to pay.
  • Doesn’t involve your assets or other possessions.
  • No additional fee payments from you, as we are paid by a government tariff.

For a free, compassionate, and personalized consultation, call Bromwich+Smith at 1.855.884.9243, or visit



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