How long does a consumer proposal stay on your credit report?
A consumer proposal will appear on your credit report for three years after you complete it or for six years from the date you signed the proposal, depending on which happens first.
| Condition | Duration |
|---|---|
| From completion of the consumer proposal | 3 years |
| From the date the consumer proposal was signed | 6 years |
Source: Government of Canada – How long information stays on your credit report
Once that time frame is up, Equifax Canada and TransUnion Canada will remove the record.
What that actually means is the clock runs from two different starting points. The filing date starts a six-year countdown. Your final payment date starts a three-year countdown. The consumer proposal drops off your report at whichever countdown hits zero first.
Credit report removal timeline by scenario
The table below shows how the credit report timeline plays out depending on when you complete the consumer proposal.
| Scenario | Filing date | Completion date | Removed from credit report |
|---|---|---|---|
| Full 5-year consumer proposal | January 2026 | January 2031 | January 2032 (6 years from filing) |
| Paid off in 3 years | January 2026 | January 2029 | January 2032 (either rule, same result) |
| Paid off in 2 years | January 2026 | January 2028 | January 2031 (3 years from completion) |
| Paid off in 1 year | January 2026 | January 2027 | January 2030 (3 years from completion) |
The faster you pay off the consumer proposal, the sooner the record will be removed.
If you complete a five-year consumer proposal, the record stays for one additional year after your final payment.
If you pay it off in two years, the record stays for three more years after your final payment.
Source: Government of Canada – How Long Information Stays on Your Credit Report
What happens to your credit rating during a consumer proposal?
Both Equifax Canada and TransUnion Canada assign a 7 rating to debts included in a consumer proposal. Revolving accounts, such as credit cards, show as R7.
Here’s what R7 means relative to other credit ratings.
| Rating | Meaning |
|---|---|
| R1 | Paying as agreed |
| R7 | Consumer proposal or debt management plan |
| R9 | Bankruptcy or bad debt written off |
Source: Equifax Canada – Consumer Credit Report User Guide
An R7 rating is better than an R9. If you are already behind on payments and carrying multiple accounts at R2 through R5 (30 to 120+ days late), a consumer proposal replaces that patchwork of missed payments with a single R7 notation. For some people, that is an improvement.
The R7 rating disappears at the same time the consumer proposal comes off your credit report, following the three-year or six-year rule above.
Source: Equifax Canada – How Long Does Information Stay on My Credit Report?
Can you get credit during a consumer proposal?
You can apply for credit while in a consumer proposal. There’s no rule preventing you from doing so.
Lenders will see the R7 on your credit report, and most will either decline the application or charge a higher interest rate. Some lenders specialize in lending to people in active consumer proposals, but the cost of borrowing is higher.
A secured credit card is the most common option. You deposit funds as collateral, and the lender issues a card with a limit matching your deposit.
Use the card for small purchases, pay the full balance every month, and the card reports positive payment history to the credit bureaus. That positive history builds alongside the R7, so when the consumer proposal eventually drops off, you already have a track record of responsible borrowing.
How to rebuild credit after a consumer proposal
Get a secured credit card
A secured credit card is the single best tool for rebuilding credit after a consumer proposal.
You put down a deposit (typically $300 to $500), and the lender gives you a card with a matching credit limit. Use the secured credit card for one or two small purchases each month and pay the balance in full every time.
The goal is to show lenders consistent, on-time payments over 12 to 24 months. After that period, many lenders will upgrade you to an unsecured card or increase your limit.
Become an authorized user
If a family member with good credit adds you as an authorized user on one of their credit cards, that card’s payment history shows up on your credit report.
You don’t need to use the card yourself. The positive history from the primary cardholder’s on-time payments helps rebuild your credit profile.
This works best when the primary cardholder has a long track record and low credit utilization. Not every lender reports authorized user activity to the credit bureaus, so confirm with the card issuer before going ahead.
Pay all bills on time
Payment history is the single largest factor in your credit score. Pay rent, utilities, phone bills, and all other recurring expenses on time each month. Set up automatic payments if you tend to miss due dates.
One missed payment after completing a consumer proposal sends the wrong signal to lenders. You are trying to prove you can handle credit responsibly, so consistency matters more than anything else during this period.
Check your credit report for errors
Request a free copy of your credit report from both Equifax Canada and TransUnion Canada.
Check that the consumer proposal is marked correctly, that the filing date and completion date are accurate, and that all debts included in the consumer proposal show a zero balance.
If you find errors, dispute them with the credit bureau in writing. Incorrect information drags down your score for no reason, and the credit bureaus are required to investigate disputes and correct inaccuracies.
Is a consumer proposal right for you?
A consumer proposal makes sense if you owe more than you can pay back in full, but you have enough income to make regular monthly payments.
Most consumer proposals involve paying back a portion of the total debt. The exact amount depends on your income, assets, and what your creditors agree to accept.
If you have no income or your income is too low to make meaningful payments, bankruptcy is a more realistic option.
If your debts are manageable with better budgeting or a debt consolidation loan, those are less damaging to your credit.
A Licensed Insolvency Trustee can run the numbers for your specific situation in a free consultation and tell you which route makes the most sense.
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Frequently asked questions
Does a consumer proposal affect my ability to get a mortgage?
Most mortgage lenders will not approve you while you are in a consumer proposal.
After the consumer proposal is complete, you can apply, but a record of your consumer proposal stays on your credit report for 3 years after completion or 6 years from the filing date, whichever comes first.
Lenders typically require a larger down payment or charge a higher interest rate while the consumer proposal is still on your report.
Source: Government of Canada – How Long Information Stays on Your Credit Report
Can I pay off a consumer proposal early?
You can pay off a consumer proposal early without penalty. Paying early reduces how long the record stays on your credit report because the three-year clock starts from your final payment.
If you pay off the consumer proposal in two years instead of five, the record drops off three years after completion rather than sitting on your report for the full six-year window from filing.
What happens if I miss payments on my consumer proposal?
Under Section 66.31 of the Bankruptcy and Insolvency Act (BIA), a consumer proposal is automatically annulled if you default on payments totalling three months or more. This applies whether the missed payments are consecutive or if partial payments accumulate to that shortfall.
If the consumer proposal is annulled, your creditors can resume collection activity, and you lose the legal protection the consumer proposal provided.
You can apply to have the consumer proposal revived through an administrative process or a court application, but reinstatement is not guaranteed.
Source: Bankruptcy and Insolvency Act, RSC 1985, c B-3, Section 66.31
Does a consumer proposal affect my spouse’s credit?
A consumer proposal only affects your credit report. If your spouse did not co-sign the debts included in your consumer proposal, their credit report and score are unaffected.
If you have joint debts, your spouse remains responsible for the full amount unless they also file a consumer proposal or bankruptcy.
Can I include CRA debt in a consumer proposal?
Canada Revenue Agency debt, including income tax arrears and GST/HST debts, can be included in a consumer proposal. The CRA votes on the consumer proposal like any other creditor. You must file all outstanding tax returns before the consumer proposal can be approved.
How does a consumer proposal compare to bankruptcy?
Both are legal insolvency processes under the BIA, but they work differently. In a consumer proposal, you repay a portion of your debt over up to five years and keep your assets.
In bankruptcy, your non-exempt assets are surrendered to a trustee, and if your income exceeds the government threshold, you make surplus income payments.
A consumer proposal stays on your credit report for three years after completion or six years from filing. A first bankruptcy stays on your credit report for six years after discharge. A consumer proposal gives you an R7 credit rating. Bankruptcy gives you an R9.
Can I get a car loan during a consumer proposal?
Getting approved for a car loan during a consumer proposal is difficult but not impossible. Lenders who work with consumers in active proposals typically charge higher interest rates, often in the range of 10% to 25% or more. A larger down payment improves your chances of approval.
If you can wait until after the consumer proposal is complete, you will qualify for better rates and terms. The R7 rating makes lenders cautious, but a completed consumer proposal looks better than an active one.
Does a consumer proposal stop wage garnishment?
When you file a consumer proposal, all wage garnishments from unsecured creditors stop immediately. The stay of proceedings under Section 69 of the BIA prevents creditors from taking legal action, including garnishing your wages. Garnishments for child support or spousal support are not affected by the stay.
Source: Bankruptcy and Insolvency Act, RSC 1985, c B-3, Section 69
Can I travel outside Canada during a consumer proposal?
A consumer proposal does not restrict your ability to travel. Unlike bankruptcy, you are not under any court supervision or reporting requirements related to travel. You can leave the country freely as long as you continue making your monthly payments.
What debts cannot be included in a consumer proposal?
Secured debts, such as mortgages and car loans, cannot be included unless you surrender the asset. Student loans that are less than seven years old cannot be discharged through a consumer proposal. Child support and spousal support obligations cannot be included. Debts arising from fraud are also excluded.
Source: Bankruptcy and Insolvency Act, RSC 1985, c B-3, Section 178