How Long does Your Bankruptcy Stay on Credit Report?

Understanding the Duration of Bankruptcy on Your Credit Report

Bankruptcy is a legal proceeding that provides relief to individuals who are unable to pay off their debts. While this process can help you regain control of your financial life, it leaves a significant impact on your credit report. One of the most common queries that individuals have is: “how long does your bankruptcy stay on the credit report?”

What is a Credit Report?

A credit report is a comprehensive document that outlines your borrowing history. In Canada, two primary credit reporting agencies exist, namely Equifax and TransUnion, often referred to as ‘credit bureaus’. These agencies report your credit history and act as information services, providing copies of your credit report to potential lenders.

Impact of Bankruptcy on Your Credit History

The act of declaring bankruptcy is a significant event that leaves a lasting impact on your credit report. When you file for bankruptcy, the Office of the Superintendent of Bankruptcy notifies the credit bureaus, who then add a note to the legal section of your credit report, indicating the date you filed for bankruptcy and the fact that you have initiated such a process.

Bankruptcy Reporting Period

The duration for which bankruptcy stays on your credit report in Canada can vary based on the credit bureau in question.

Equifax

According to the official website of Equifax, a bankruptcy record stays on your credit report for six years from the date of your discharge. If you file for bankruptcy a second time, the first record reappears, and both bankruptcies remain on your report for 14 years from their respective discharge dates.

TransUnion

TransUnion, on the other hand, maintains the bankruptcy information on your credit file for seven years from the date of discharge or fourteen years from the filing date, depending on the provincial legislation. At the end of this period, the bankruptcy record is removed from your credit report.

Impact of Consumer Proposal on Your Credit Report

A consumer proposal is an alternative to bankruptcy, where you agree to pay a portion of your debts over a specific period. The duration for which a consumer proposal stays on your credit report differs based on the credit bureau reporting it.

Equifax

With Equifax, a consumer proposal is reported for three years after your last payment, or six years from the date you filed the proposal, whichever comes first.

TransUnion

TransUnion maintains a consumer proposal and all accounts reported as satisfied through the proposal on your file for three years from the date you satisfied the proposal or six years after the date you defaulted on the account, whichever comes first.

Rectifying Errors on Your Credit Report

There may be instances where you find inaccuracies in your credit report. In such situations, it is advisable to contact the credit reporting agency and inform them about the error. The credit reporting agency will then contact the financial institution that reported the information to confirm if it is indeed an error.

Accessing Your Credit Report

You can access your credit report in two ways: either through the mail or via the internet. If you wish to obtain your credit report for free, you must use the mail option.

After Bankruptcy: The Road to Credit Recovery

While bankruptcy can seem like a daunting process, it is essential to remember that it is a step towards regaining control over your financial life. Once the bankruptcy record is removed from your credit report, you can begin rebuilding your credit.

It is possible to rebuild your credit even before the bankruptcy record is removed from your report. By ensuring timely payment of your bills, maintaining a steady income, and demonstrating job stability, you can gradually improve your credit score.

Remember, filing for bankruptcy or a consumer proposal is not the end of your financial journey but a stepping stone towards a secure financial future.

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