Consumer Proposal Rebuilding: Life After Debt

Your consumer proposal lasts for a maximum of 5 years or 60 months, after which you are debt-free as long as you’ve met the terms of the agreement.

For many debtors, the Consumer Proposal concludes a painful chapter of their lives.

But once it ends, it is time to kick start the process of rebuilding your financial life.

Indeed, the end of the program doesn’t affect your credit rating.

However, while the consumer proposal doesn’t improve your credit, it puts you in a better position to address your financial goals and create a stable situation.

The consumer proposal rebuilding strategy accompanies former debtors into their debt-free life.

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Does your credit rating change overnight?

Your credit score doesn’t change when your consumer proposal comes to an end.

The consumer proposal doesn’t erase the debt from your credit history.

Instead, it provides a way to manage and repay it.

In other words, the consumer proposal rebuilding phase begins with an R7 rating, which is one of the lowest credit scores.

When an individual files a consumer proposal, Canada’s credit bureaus automatically drop their credit score to an R7, which remains the same throughout the consumer proposal.

As a result, everybody starts the consumer proposal rebuilding journey with the same credit score.

You will receive counselling support in the form of two sessions with your Licensed Insolvency Trustee.

The sessions focus on sharing known and proven techniques to boost your credit rating and help you rebuild your finances.

From the moment the consumer proposal ends, the way you manage your money will be detrimental to rebuilding your credit score.

Managing your credit report for consumer proposal rebuilding

You can use the free disclosure credit report to manage your credit score and track improvements.

The free disclosure report is available annually and allows you to spot mistakes and make corrections to improve your score.

It’s a good idea to compare reports from both main credit bureaus, Transunion and Equifax to make sure you’re not missing anything.

The record of the consumer proposal will remain in your credit report for 3 years after the end of the consumer proposal.

Your certificate of full performance, which you receive at the end of the consumer proposal, can be helpful to ask credit bureaus to proceed to corrections if the debt has not been removed from your record.

Avoid negative reporting

Negative reporting happens when you don’t make payments on time.

Therefore, managing the impact of the debt on your credit score aims to eliminate negative reporting from your creditors.

Late payments that have been negotiated through your consumer proposal will disappear within 3 years of the certificate of full performance.

However, missing out payments during the consumer proposal rebuilding phase will slow down your credit score improvement.

You can find many helpful ways on how to be better organized with your money and finances.

As a rule of thumb, the priority when building financial stability is to keep track of your income and expenses.

To do so, you can set payment reminders, automate recurring payments, and balance your ins and outs throughout the month.

It can pay to get in touch with service providers and other creditors to discuss changing the payment date if it ensures you can meet the payment requirements on time.

Create positive reporting

Positive reporting is, in essence, a credit rating bonus.

Credit cards that need a security deposit are an excellent strategy for individuals looking into consumer proposal rebuilding.

Indeed, a secured credit card generates positive reporting because it highlights fund availability.

You need to save up a deposit to apply for a secured credit card account.

When you end your consumer proposal with a low R7 rating, a security deposit makes it easier for money lenders to accept your credit card application.

The deposit will ultimately be returned to you once the lender is satisfied that you can pay your credit bills.

Improve your financial profile

RRSP loans enable you to invest in your retirement savings plan and reduce your tax income debt.

By choosing to invest a manageable amount in your bank, you can boost your financial profile.

An RRSP loan should be taken at the start of the year and repaid before the end of the year.

Additionally, RRSPs let first-time home buyers borrow interest-free, as long as they can pay back within the set timeframe.

Show consistency

Employment security and consistent income influence money lenders positively, which can have a positive impact on rebuilding your financial future.

Similarly, saving accounts can also demonstrate stability and influence your credit report.


Unsure how to tackle consumer proposal rebuilding? Get in touch with a trustee to discuss your options.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal

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