How Long Does Bankruptcy Affect My Credit Report?

| Category: Bankruptcy FAQ | Bankruptcy in Ontario
Category: Bankruptcy FAQ | Bankruptcy in Ontario | (8) comments

credit report and bankruptcyThere are two main credit reporting agencies in Ontario: Equifax and Trans Union. Information about your bankruptcy or consumer proposal is reported to these agencies by the Office of The Superintendent of Bankruptcy (OSB), not your trustee. The OSB will advise these agencies when you file a bankruptcy or proposal and when you receive your discharge.

If you file ANY of a bankruptcy, consumer proposal, debt management plan or do a debt settlement, a not will appear on your credit report that can negatively impact your credit. In general:

  • a first bankruptcy will remain on your credit report for six years after you are discharged;
  • a consumer proposal (or debt management or debt settlement plan will remain on your credit report for three years after all of your payments are completed.

Bankruptcy does not mean you cannot borrow for six or seven years. This just means that the note will remain on your report, however there are many other factors that affect your ability to get credit.

If you have a job, and if you have a down payment or security deposit, it is possible to repair your credit sooner. Many people are able to buy a car or a house in less than seven years after their bankruptcy ends, if they are able to save money and begin repairing their credit. Here are some ways you can improve your credit after filing for bankruptcy:

  1. Pay you bills on time.
  2. Get a copy of your credit report, review it for errors and make sure your bankruptcy notice is removed when it should be.
  3. Start saving so you can have a larger down payment which will positively affect your ability to be approved for a new loan.
  4. Consider rebuilding  your credit with the use of a secured credit card.
  5. Once you do receive credit, use it wisely. Show that you can make your payments on time and do not over-use credit again.

Saving money, paying your bills on time and re-applying for credit slowly can change how long bankruptcy affects your credit, and your ability to borrow in Ontario.

Leave A Comment

  1. J. Douglas Hoyes, Trustee

    If you have ceased to be a student for more than seven years at the time you file bankruptcy, your student loans are included in the bankruptcy. If you have been out of school for less than seven years they are not automatically discharged.

    The seven year rule can get a bit complicated, so I suggest you contact an Ontario bankruptcy trustee to explain the rule in more detail and advise you on your options.

    Reply
  2. Alona

    Hey,

    I’m 23 years old. Don’t have any assets. Can’t repay my loans. Am I qualified to file for bankruptcy?

    If not, how am I settle debt with no income yet?

    Reply
  3. Patricia

    What happens when a bankruptcy is removed from Equifax but not Trans Union. Its been 6 years since my bankruptcy and Equifax has removed it from my report but Trans Union says its seven years before it comes off.

    Reply
    1. J. Douglas Hoyes, Trustee

      Patricia: Each credit reporting agency in Ontario determines how long they will report a bankruptcy. Equifax purges a first bankruptcy six years after discharge, while Trans Union may leave it there for seven years. In your case you can take steps to rebuild your credit now, but the bankruptcy may remain on your Trans Union credit report for seven years.

      Reply
  4. J. Douglas Hoyes, Trustee

    Alona: Yes, you are qualified to file bankruptcy if you owe more than $1,000 and are unable to repay your debts. However, since for many people the reason they claim bankruptcy is to prevent their wages from being garnisheed, your other option would be to wait until you are working and then contact your creditors directly to arrange a repayment plan. A credit counsellor can also help with this. You could also consult with a bankruptcy trustee to review your options.

    Reply
  5. Sandi

    I was involved with a consumer proposal 7 years ago. The proposal has been lifted from my credit score BUT one of the creditors that was included in the proposal still remains on my record. Is this right?

    Reply
  6. J. Douglas Hoyes, Trustee

    Hi Sandi. After seven years the creditor should no longer be appearing on your credit report, since the maximum period most information remains on a credit report is for six years. I would suggest you confirm that all of the dates on your credit report are correct, and that there was no activity on your account after the proposal started. You should also notify both the credit bureau and the creditor of the error and ask them to correct it.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>