A consumer proposal is a legal agreement between you and your creditors, administered by a Licensed Insolvency Trustee, that lets you settle your debts for less than the full amount. It is a uniquely Canadian option not available in the United States. If you are considering a consumer proposal or have already completed one, here is exactly how it affects your credit report.
How Long Does a Consumer Proposal Stay on Your Credit Report in Canada?
A consumer proposal stays on your Equifax Canada credit report for 3 years after the date of your final payment. TransUnion Canada uses the same 3-year post-completion timeline. The total time it appears on your report depends on how long the proposal takes to complete.
For example, if you complete a 5-year consumer proposal and make your final payment in April 2026, the entry remains on your credit report until approximately April 2029.
Consumer Proposal vs Bankruptcy: Which Stays Longer?
This is one area where a consumer proposal has an advantage over bankruptcy. A first-time bankruptcy in Canada stays on your credit report for 6 years after discharge. A consumer proposal stays for only 3 years after completion. If you complete a short consumer proposal (under 3 years), your total credit report impact could be shorter than bankruptcy.
How Does It Appear on Your Credit Report?
The consumer proposal is listed in the public records section of your Equifax and TransUnion credit reports. All accounts included in the proposal are typically marked as R7, which stands for regular payments under a consolidation order or similar arrangement. R7 is less severe than R9 (bankruptcy) but still significantly negative.
Does Making Payments During the Proposal Help?
Yes. Making all your proposal payments on time is important for two reasons. First, completing the proposal is required for the 3-year countdown to begin. If you default on a consumer proposal, it can be annulled, and your original debts may be reinstated. Second, some Canadians open a secured credit card while completing a consumer proposal to begin building positive credit history before the proposal is even finished.
What About Quebec?
Quebec residents who file a consumer proposal are subject to the same federal rules under the Bankruptcy and Insolvency Act. The 3-year post-completion reporting window applies in Quebec the same as in Ontario, British Columbia, and every other province.
What Can You Do While Waiting?
The most effective strategy is to start rebuilding as soon as possible. A secured credit card, used responsibly and paid in full each month, begins adding positive history immediately. Many Canadians who complete consumer proposals see their credit scores recover substantially within 12 to 18 months of finishing the proposal.
When Professional Help Makes Sense
After completing a consumer proposal, check both your Equifax and TransUnion reports. Accounts that were included in the proposal should all be marked consistently. If any account is still showing as an active collection or an unpaid balance, that is an error you can dispute. A credit repair professional can review your reports and file disputes on your behalf.
FAQ
**How long does a consumer proposal stay on my credit report in Canada?** Three years after the date of your final payment, at both Equifax Canada and TransUnion Canada.
**Does a consumer proposal stay on my credit report while I am still paying?** Yes. The proposal appears on your report from the time it is filed until 3 years after you complete it.
**Can I get a mortgage after a consumer proposal in Canada?** Yes, but most traditional lenders require the proposal to be completed and a period of credit rebuilding. Many Canadians qualify for a mortgage 2 years after completing a proposal with a rebuilt credit profile.
For a free consultation on your credit situation, call (437) 755-6579. Our team works with Canadians across the GTA.