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There 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 (Equiax) or seven years (TransUnion) 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:
- Pay you bills on time.
- Get a copy of your credit report, review it for errors and make sure your bankruptcy notice is removed when it should be.
- Start saving so you can have a larger down payment which will positively affect your ability to be approved for a new loan.
- Consider rebuilding your credit with the use of a secured credit card.
- 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.
What happens to student loans if I declare bankruptcy?
Hi my name is Angela and was wondering how does a second bankruptcy work. Unfortunately I am becoming overcome by debt and might have to look into bankruptcy a second time the first one was in 2005 and discharged a year later . Any help would be grest
Hi Angela. In a first bankruptcy you are eligible to be automatically discharged in 9 months (or 21 months if you have surplus income).
In a second bankruptcy you are eligible to be automatically discharged in 24 months (or 36 months if you have surplus income). So, the most significant impact of a second bankruptcy is that it lasts longer. For that reason it may be wise to consider a consumer proposal as an alternative to a second bankruptcy.
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.
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?
Hello.. I am currently thinking of filling for bankruptcy, and in regards to all the negative aspects of such, I am prepared to deal with those. However, one of my debts is a $1000 over-drawn bank account that I shared with my now estranged wife. Her name is still on the account, and the bank refuses to remove it, despite the fact the she hasn’t used or had access to the account in over a year, until the over-draft is paid off. Is there going to be negative consequences for her because her name is still on this account? I don’t want her to have to suffer for debt that I accumulated.
Hi Michael. If you go bankrupt, all of your debts are included in your bankruptcy, including your overdraft. The bank would then be able to pursue the joint borrower (your ex-wife) for the debt. The only way to prevent this is for you or your ex-wife to pay off the overdraft before you file bankruptcy.
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.
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.
I’m curious. You mentioned Equifax drops bankruptcy after 6 years and transunion after 7.
This is due to transunion following the maximum reporting allowed under law in ontario.
If I moved to a province that has a legal max of 6 years would transunion be legally required to follow the maximum as prescribed by the province I live in or by the province a person lived in when a bankruptcy occurred.
Hi Ron. That’s a good question, and I don’t know the answer, but I would speculate that since bankruptcy is federal law and credit reporting is governed by provincial laws, I would assume that the laws in the province where you currently live would apply, because that’s where you are getting your credit report.
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.
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?
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.
i was told that bankruptcy is now 9 months before discharge i went through it in 2010 it was 21 months . i know a woman that wants declare bankruptcy is on welfare her trustee told her 9 months ?
Hi Gerry. The length of a bankruptcy depends on many factors, including your income, and whether or not you were previously bankrupt.
A first time bankrupt with no surplus income is eligible to be automatically discharged in nine months. Your friend on welfare would therefore have low income, so yes, she would probably be a nine month bankruptcy.
In your case your income was probably above the limit, so your bankruptcy was extended for an additional year, which is why your bankruptcy was 21 months.
HI…I was discharged from bankruptcy on April 28th, 2008. A year or so later I acquired a Secure Credit Card. In 2010 I purchased a Honda CRV with a good downpayment and was able to get honda to finance the rest. My Crv will be paid off this coming may. I now have a small business (incorporated) for over a year now. (besides my fulltime permanent elementary school teaching job -have been teaching for 15 years). I would like to apply for a small business credit card but not sure if my ‘bankruptcy’ term is over.
Any help is appreciated!
Thanks
Hi Jennifer. There are two different concepts here:
Yes, your bankruptcy is over; it ended when you were discharged in 2008, which is why you have been able to obtain credit.
You are presumably asking about how long bankruptcy appears on your credit report. With Equifax it appears as a note on your credit report for six years after you are discharged, so if you were discharged in April 2008, the note will appear until April 2014, so the answer is yes, the note should no longer appear on your credit report. To be sure, you can contact Equifax and Trans Union and request a free copy of your credit report, which should confirm that your bankruptcy no longer appears on your credit report.
I have seen a trustee and though she recommends Bankruptcy given my income level, I am inclined toward a Proposal as I see it as the lesser of two evils. Plus, I volunteer on two not-for-profit Boards and am pretty sure that a bankrupt cannot be a Director on a Board. Is that correct?
If it is correct, how long would it be before I can sit on a Board?
Hi Sharon. A bankrupt cannot serve as a director of a corporation. In most cases it’s not an issue if you are on the board of a not-for-profit agency. To be sure, you should consult the agencies bylaws, and confirm that if your agency has director’s insurance you will still be covered if you are bankrupt.
As for a proposal being the “lesser of two evils”, that may be true, but you will want to confirm that the amount you will pay in a proposal is reasonable given your income, which may be why the trustee recommended a bankruptcy.
Hi I’m considering a consumer proposal, and I’m aware that it will stay on my report 3years after the discharge, I’m worried that even though it will disappear from my credit after 3 years the bank will blacklist my name for ever for any future borrowing. This worry me cause I’m in debt will all major banks in Canada and I’m worried it will stay in their records for ever.
Pls advise any help is appreciated.
Thanks.
Hi Francis. Banks don’t “blacklist” people because they want customers. So, even though you owe money to banks now, if you complete your proposal and rebuild your credit, it is very likely that you will be able to borrow again in the future, provided you meet the normal lending requirements (such as suitable income, etc.).
Bankruptcy filed in 2009, discharged in 2010. On my Trans Union file under the Bankruprcy section it says this was ‘reported on’ and ‘updated on’ February 2012. This in turn has changed the ‘last payment date’ on some of my creditor files included in the bankruptcy to March 2012 however these accounts were closed in 2009. First what would have triggered a date change under the Bankruptcy section and second how do I correct the dates on the creditor files in question?
That is a very interesting question. It would appear that there is an error on your credit report, because obviously the last activity date should show as the date of discharge, not a subsequent date. It is possible that there was an error on the discharge date reported to the credit bureau; perhaps the trustee’s discharge date was reported, instead of your discharge date.
Regardless, the first step would be to talk to your trustee to confirm that you have your correct date of discharge. Then you should complete the dispute resolution form included with your credit report and send that to Trans Union and ask them to correct it.
It would also be prudent to get a copy of your credit report from Equifax to see if it contains the same error.
I received a letter in early 2012 from my trustee that indicated my trustee, in regards to my estate, had ‘applied for taxation of our accounts and for our discharge’. The Superintendent of Bankruptcy issued a letter of comment to my trustee ‘that does not request that our accounts be taxed by the registrar’. This seems to have triggered a ‘disbursement’ of ‘dividends’ in my estate account to creditors that were included in my bankruptcy. Dates seem to collaborate this conclusion however this only shows up on the TransUnion file not Equifax. The discharge date is correct on the TransUnion file but the ‘reported on’ and ‘last updated on’ date changed in regards to above comment. Will I be able to dispute these date?
Does the bankruptcy purge 6 years to the date for Equifax, or by the month? I was discharged Aug 26, 2009, therefore technically free on my report from Equifax in 2 days, as it will be exactly 6 years, however I hear repeatedly examples only mentioning the month. Does this mean that it will remain until 12:00am September 1st?
I know TransUnion is 7 years. I am trying to secure a mortgage with a lender that only uses Equifax, but I don’t want to get the loan until it is removed completely for a better rate.
Thanks!
Hi Vincent. You would have to contact Equifax to get an exact answer, but it would be safe to assume that since Equifax doesn’t necessarily update your credit report every day, it’s best to wait until the start of the next month to check your credit report to confirm that the bankruptcy was purged.
I can’t seem to get a straight answer about proposals. Does it stay on my credit file for 3 years or 7 years? Does the creditor disappear from my file, or is it just reported differently somehow? If it’s 3 years, does the clock start ticking on that as soon as I pay off the required amount, even if it’s before the term (48 months) is up?
Hi Ross. The note in the “legal section” of your credit report stays on your credit report for three years after you have made all of the payments in your proposal. For example, if you have a five year proposal, but you pay it off early in three years, the note would remain on your credit report for a total of six years from the start of the proposal (three years for the proposal, plus an additional three years).
Each individual creditor reports individually to the credit bureau, and in most cases what they report stays on your credit report for six years from the date of the last activity. So in most cases they stop reporting once the proposal is filed, so the notation submitted by the creditor would be purged after six years, regardless of when the proposal is completed.
Hi, im thinking about doing personal bankruptcy, I’m currently on welfare and don’t have a job at the moment .I was told that if I was to do this I wouldnt be able to get a credit card for 6 months(which is fine) but wasnt told it would stay on my credit report for 6-7 years, which My question is I plan on going back to school and I will need OSAP’s assitance to do so will I not be able to do this if i declare bankruptcy? Also how long would it be before i could get a loan for school, finance a car or buy a house. I’m thinking about my future and dont want to get my self into a situation where i couldnt do any of those for 7 years but mainly osap cause going back to school is something i want to do within a year or so . And one other thing is this is my first time declaring bankruptcy if this matters at all, Thank you for your time
Hi John. It is possible to qualify for OSAP (student loans) even if you are bankrupt.
The standard procedure is to apply for OSAP, and if OSAP has any questions the licensed insolvency trustee who is doing your bankruptcy will send a letter to OSAP advising that the trustee will not take your OSAP. That is usually all OSAP requires.
To find out more, we suggest you contact an Ontario licensed insolvency trustee who will give you a no charge initial consultation and review all of your options.
I filed for bankruptcy in jan 2009 and was disharged in march 2010.
Back then, they told me it would be on my record for 7years total, 6 years after being discharged.
I called trans union to make sure it has been removed from my file (may 2016) and they say ontario law is 7 years from discharge????
I see on your site above you also mention 6 years like my trustee said.
But I found ontario sites that say 7 years from discharge.
Have the laws changed??? Was I misinformed??
For the record it was my first bankruptcy
Hi Rob. The confusion is that Equifax generally removes the first bankruptcy six years after discharge, while TransUnion removes it after seven years, so the length of time will depend on which credit bureau you are looking at.
I filed for bankruptcy back on 2000 but never completed the required steps in order to get it discharged. I was told that after 10 years it should automatically get discharged even if all requirements were not met. The bankruptcy no longer shows on Equifax but it still shows on Transunion. I called Transunion and they said it will never be removed until the receive a discharge notice from the trustee. How do I get this removed from the credit report? Do I have to go back to the original trustee and have them reopen the bankruptcy even though it’s been 16 years?
Hi Sandy. You are asking two different questions.
First, how bankruptcies are reported on the credit reports is up to the credit reporting agency. In your case Equifax has purged it, but TransUnion hasn’t, so it’s up to TransUnion how they handle their reporting.
Seconde, the ultimate solution is to complete your duties and obtain your discharge, and for that you should contact your original trustee to determine what steps are required.
I filed for bankruptcy in a province other than Ontario in March 2009. I was discharged on Aug. 31, 2010. The province in which I filed has regulated the bankruptcy to be off my credit file in 6 years from date of discharge. Will the fact that I am now living in Ontario change that? Will I have to wait another year for the file to drop from my TransUnion report? The Equifax report is already clear.
Hi JR. In general, Equifax leaves a first bankruptcy on your credit report for six years, and TransUnion for seven, regardless of the province, so it is likely that it will be the end of August, 2017 before your TransUnion report removes the bankruptcy notation.
I am 50 years old and file for bankruptcy when I was 18 and 20. It took me years to have clean credit and a great score. I got sick last year and got overwhelmed trying to keep my head afloat and need help. If I do a consumer proposal …I know it will appear on my credit report but will my old bankruptcies reappear too? I’m so confused as to what to do but I’m drowning. Thank you.
Hi Dani. As a general rule, no, an old bankruptcy does not reappear on your credit report if you file a consumer proposal. A second bankruptcy does usually “bring back” the first bankruptcy on your credit report, but my understanding of standard practice for the credit reporting agencies today is that a consumer proposal does not “bring back” a first bankruptcy.
I declared bankruptcy 5 years ago and have since used a secure credit card and paid everything on time, no debt today. If a landlord runs a credit check on me, will my bankruptcy show up and affect my credit rating? Will the landlord see that I declared bankruptcy 5 years ago? Thankyou, Deborah
Hi Debbie. Depending on the credit bureau, a first bankruptcy generally remains on your credit report for six or seven years after the date of discharge, so in your case, yes, your bankruptcy will appear on your credit report. However, since it was five years ago, and since you have taken steps to rebuild your credit, it will have less of an impact on your credit score than if you were currently bankrupt and if you had not taken any steps to rebuild your credit.
Im looking to claim bankruptcy but after ordering my credit report from both companys everything isnt on there and i still receive calls. Will everything be included in my bankruptcy even if its not on tge reports yet??
Yes, all debts are included, whether or not they appear on your credit report. However, if no debts appear, I would start by asking the collectors who are calling you to send you proof that you actually owe the money, because if they are very old they may have no legal way to collect from you.
Given the difference between Equifax and TransUnion reporting for 6 vs 7 years, at what point does your score potentially improve if you’ve been rebuilding your credit during the ensuing years? Is it possible to have two different scores between the two reporting agencies once 6 years has passed?
Hi Matt. Yes, it is very common to have a different credit score at each different credit bureau, because they each use slightly different formulas in the calculation. Each individual lender also has their own formulas, so you will have many different credit scores, depending on who is doing the calculation.
Your credit score can begin to improve as soon as you are discharged from bankruptcy. As time goes by, and you get farther away from your bankruptcy, your credit score improves; it happens gradually, not all at once at the end of six years. By keeping your monthly bills up to date, your score will improve. Other factors like length of time at your job, or living at the same address, will also increase your score.
You can also improve your credit score by getting a small credit card and paying it off each month, and that can be done well before the six years is up.
I just applied for a refinance mortgage and the broker is telling me the bank is saying no because there is a Bankruptcy on my credit report but that was back in 2001 – 2002 it was discharged, shouldn’t this be off my record by now. How do I get it off?
A first bankruptcy normally remains on your credit report for 7 years from the date you were discharged. A second bankruptcy may remain for up to 14 years.
If something is on your credit report that shouldn’t be there you have to use the “dispute process” for the credit reporting agency to have it corrected. There is no quick/easy fix.
You may want to consider if the broker is just using the bankruptcy as an excuse – it may be you didn’t qualify for other reasons, but it is easier to “blame” the bankruptcy. Just saying, you should get a copy of your credit reports yourself and see what they say.
Hi
A second bankruptcy on the credit report does it state that it is a “second bankruptcy” or it’s just says “bankruptcy” for 14 years after discharge ?
Also is only the note in the legal section in the credit report for 14 years on file or also each individual credit account in the bankruptcy stays on the credit report for 14 years ?
Thank you
I do not believe either of the major credit reporting agencies display anything other than “bankruptcy” for second or third filings. The debts remain as long as the creditors continue to report them. The fact that a person filed a second time is disclosed in the legal section for up to 14 years. I hope that helps.
Hi, I’m from Quebec. My first bankruptcy was discharged in October 2009 and my 2nd bankruptcy discharged in august 2018. Will my first bankruptcy will be removed from equifax in October 2023? Or they will both fall off 14 years from second bankruptcy discharge so let’s say august 2032? Thank you
In the case of a second bankruptcy, Equifax purges both bankruptcies 14 years after the discharge of the second bankruptcy.