Do debt solutions affect your credit score in Canada?

How will filing a consumer proposal or a bankruptcy affect my credit score is one of the questions we are asked quite frequently.  For some people in financial difficulty, their credit score may still be quite good.  They are making their monthly payments or minimum payments each month on their debt but may find themselves no further ahead in bringing the total amount of their debt down.  Others may have a poor credit score as they have missed payments, had non-sufficient payments (NSF’s) or had assets seized by their creditors.

The Impact Of Debt Solutions On Your Credit

Filing a bankruptcy or consumer proposal will be reported on your credit report.

A consumer proposal is recorded as an R7 and will remain on your credit bureau for three (3) years from the date on which you complete your obligations under your proposal and you obtain your certificate of full completion.

A first time bankruptcy is recorded as an R9 on your credit bureau.  It will remain on your credit bureau for six (6) to seven (7) years depending on the credit bureau, from the date on which you receive your discharge from bankruptcy. A second time bankruptcy will stay on your credit bureau for fourteen (14) years from your date of discharge..

The impact of a debt solution on your credit bureau score should be one of the considerations when looking for a debt solution but not the only consideration.   For more information, please feel free to reach out to us for a free, no obligation consult to review your specific circumstances.