I’ve filed a Consumer Proposal and just checked my credit rating. My Proposal is showing as a bankruptcy! I thought they were different! Why didn’t my Trustee tell me!
Rest assured – you are not bankrupt! The information on your credit report is used to calculate your credit rating and is compiled by credit bureaus from records kept by the government. The information is not obtained from your Trustee’s records or supplied by your Trustee for privacy reasons. After you have filed a consumer proposal, you should check your credit report to confirm that the proposal is reported as a proposal and NOT a bankruptcy, as these processes are very different. Aren’t sure how to do that? You can find directions to get a free copy of your credit report here. Once you have paid off your proposal, you should also re-check your credit report to ensure it shows that you have completed the process successfully.
So now that I have a copy of my credit report, how do I correct the errors that I found?
It is not uncommon for there to be errors on your credit bureau, even if you haven’t filed a proposal, you are the only person who will know that the information is not correct. Should you find an error, both Equifax and Transunion, the two main credit bureaus in Canada, have a process to help you correct any errors. You can find Equifax’s dispute process here, and Transunion’s process is outlined here.
How long will my proposal affect my credit rating?
In general, Equifax removes a consumer proposal from your credit report 3 years after your proposal is paid off. TransUnion removes a consumer proposal from your credit report on the earliest of 3 years after you’ve paid off the proposal, or 6 years after you file the proposal. While you are making payments on a proposal, it will show as an ‘R9’, and is upgraded to an ‘R7’ when your payments are completed.
To understand your financial options, and if a Consumer Proposal might be a good option for your, be sure to contact us for your free consultation.