How Does a Consumer Proposal Affect Your Credit in Canada?

It is reported on your credit report, but not forever. In British Columbia, the law limits how long adverse information can be reported. I'm Doug Thode, a Licensed Insolvency Trustee in Kelowna, helping people across the entire province of British Columbia and the Yukon, from Burnaby and Richmond to Penticton, Kamloops and Whitehorse.

Where this comes from

Credit reporting in BC is governed by the Business Practices and Consumer Protection Act, Part 6. Section 109 says adverse information generally can't be reported for more than six years from the event. That is the legal ceiling.

What the credit bureaus report

Within that limit, the credit bureaus set their own reporting periods. Equifax's website says a consumer proposal is removed three years after you've paid off the debts in the proposal, or six years after it was filed, whichever comes first. The Government of Canada's financial consumer agency says TransUnion uses the same periods. Check both bureau websites, because their policies can change.

How bankruptcy compares

For comparison, a bankruptcy is different. Section 109 sets the limit at six years after the date you are discharged, and Equifax's website says the same. A second bankruptcy is treated differently, and stays on your report longer.

Check your own credit report

You don't have to guess what is on your file. You can request your credit report from both Equifax and TransUnion and see exactly what each one is reporting. If something is wrong, or has stayed past its reporting period, you can dispute it with the bureau.

Related questions

Will a consumer proposal stop wage garnishment in BC? Will I lose my house or car in a consumer proposal? How long does a consumer proposal last in Canada? What is the difference between a consumer proposal and bankruptcy?

By the time most people file, their credit is already damaged. A consumer proposal stops the damage and lets you start rebuilding. Call 1-866-712-5353 or visit outofdebt.ca.