Independent · Canadian rules and data only · Reviewed November 4, 2026

    4 min read
    Credit

    What a Consumer Proposal Does to Your Credit and How Long It Lasts

    Quick Answer

    A consumer proposal is a legal process run by a Licensed Insolvency Trustee, for up to 5 years. The Office of the Superintendent of Bankruptcy reports filings to Equifax and TransUnion. The FCAC says it is removed 3 years after you pay off the included debts, or 6 years after you sign, whichever is earlier. Next step: ask your Licensed Insolvency Trustee how a proposal would affect your reports.

    Key facts

    Term
    No longer than five years
    Source: OSB consumer proposals page
    Run by
    A Licensed Insolvency Trustee
    Source: OSB consumer proposals page
    Removed from your report (FCAC)
    3 years after you pay off the included debts, or 6 years after you sign, whichever is earlier
    Source: FCAC, modified July 1, 2026
    Equifax (OSB)
    3 years after completion
    Source: OSB compare debt solutions, modified Nov. 26, 2025
    Rating 7 (TransUnion)
    Making payments under a debt repayment program
    Source: TransUnion Canada

    If you're considering a Consumer Proposal, or you've already filed one, the credit impact is usually the first question that comes up. Here's exactly what happens to your credit report, how long it lasts, and what the timeline actually looks like for rebuilding afterward.

    The Office of the Superintendent of Bankruptcy says a consumer proposal is a formal, legally binding process run by a Licensed Insolvency Trustee. You offer to repay part of what you owe, extend the repayment period, or both. The term cannot be longer than five years. Once you file, you stop paying unsecured creditors directly.

    The Office of the Superintendent of Bankruptcy says it reports consumer proposal filings to Equifax and TransUnion, and reports when your obligations are fully performed.

    TransUnion defines a rating of 7 as making payments under a debt repayment program. We did not find an official page that says every included debt shows as an R7, so check your own reports. See our guide on what R1 through R9 mean.

    We also did not find an official page on how a mortgage or car loan that you keep paying outside the proposal is reported. Ask your trustee.

    TransUnion Canada defines a 7 as making payments under a debt repayment program, and a 9 as bad debt, collection or skip. How a lender reads each one depends on the lender. We did not find an official page that ranks lender reactions.

    The FCAC says a consumer proposal is removed 3 years after you pay off the included debts, or 6 years after you sign it, whichever is earlier ( Financial Consumer Agency of Canada).

    The Office of the Superintendent of Bankruptcy describes it by bureau: Equifax removes it 3 years after completion, and TransUnion removes it 3 years after completion or 6 years after signing, whichever is sooner. Check your own reports, and ask the bureau if a date looks wrong.

    Yes. The Office of the Superintendent of Bankruptcy says credit scores can be rebuilt by paying on time, keeping credit use below 30% of available credit, and keeping good habits over time. Make every proposal payment on time.

    Once your proposal is complete (or even while it's active, for some product types), the practical next question is usually which credit-building product actually makes sense for your situation. We compare secured and credit-building card options in our credit cards comparison.

    This article explains general credit reporting concepts related to Consumer Proposals in Canada. It is not financial or legal advice. If you're considering a Consumer Proposal, a Licensed Insolvency Trustee can walk you through whether it fits your specific situation. See our Editorial Policy for how we verify information on this site.

    Frequently Asked Questions

    TransUnion defines a 7 as making payments under a debt repayment program. We did not find an official page that says every included debt shows as an R7, so check your own reports. The Office of the Superintendent of Bankruptcy reports filings to Equifax and TransUnion.

    The FCAC says 3 years after you pay off the included debts, or 6 years after you sign it, whichever is earlier. The Office of the Superintendent of Bankruptcy says Equifax removes it 3 years after completion, and TransUnion at 3 years after completion or 6 years after signing, whichever is sooner.

    The Office of the Superintendent of Bankruptcy says a first bankruptcy stays on your report 6 or 7 years after discharge, depending on province, while a consumer proposal is removed 3 years after completion with Equifax. A licensed trustee can compare them for your case.

    A proposal deals with your unsecured creditors. We did not find an official page on how a mortgage or car loan you keep paying outside the proposal is reported, so ask your trustee.

    Yes. The Office of the Superintendent of Bankruptcy says scores can be rebuilt with on-time payments and credit use below 30% of available credit.

    Try it with your numbers