Understanding the Credit Reporting Process For A Bankruptcy

Understanding the Credit Reporting Process For A Bankruptcy in Canada

The process of credit reporting in the context of bankruptcy is a topic that often draws questions, especially from those who have experienced, or are considering, bankruptcy. To help demystify this process, we take a deep dive into understanding how credit bureaus, primarily Equifax Canada Inc. and TransUnion of Canada, handle the reporting of bankruptcy and related financial matters.

A Snapshot of the Credit Reporting Landscape

Credit bureaus play a vital role in the financial system. Their main job is to gather and maintain data that would be of importance to lenders when deciding whether to approve a loan. Let’s take a closer look at how these bureaus operate.

To compile a comprehensive credit report, credit bureaus gather data from two main sources:


  • Financial transactions reported by banks, credit card companies, and other financial institutions.
  • Public records, which include information such as judgements, bankruptcies, consumer proposals, and any registered liens or debt actions.


Reporting Bankruptcy

If you file for bankruptcy or a consumer proposal, this information will reflect on your credit report. The report will contain details like:


  • The fact that you filed for bankruptcy or a consumer proposal.
  • The date of filing.
  • The date of discharge or completion.


Note that your credit report updates in three stages: filing notification, discharge or completion notification, and removal after a predetermined period. The last step should happen automatically, but it’s crucial to monitor this process yourself to ensure accuracy.

Duration of Bankruptcy Records on Your Credit Report

There are legal limitations on the period negative information, such as bankruptcy, can stay on your credit report. Let’s unpack how long this information remains on your report, as per the policies of TransUnion and Equifax.

Bankruptcy Record Retention by TransUnion

TransUnion clearly outlines on their website how long they keep a record of your bankruptcy:


First-time Bankruptcy:
The duration varies based on provincial law. For BC, YK, NWT, NU, AB, SK, MB, NS, the record stays for six years from the discharge date. For ON, PQ, NB, PEI & NL, it’s seven years from the discharge date.

Subsequent Bankruptcies:
Each bankruptcy stays on your report for fourteen years from the discharge date.

When the bankruptcy record is removed, all debts included in the bankruptcy are also removed from your file.

Consumer Proposal Record Retention by TransUnion

A consumer proposal and all accounts satisfied through the proposal will be removed from your file three years from the date you completed the proposal or six years after the date you defaulted on the account, whichever date comes first.

Other Debt Repayment Programs Record Retention by TransUnion

Debts satisfied through the filing of an Orderly Payment of Debts or a Debt Management Plan will be removed from your file two years from the date you completed the program or six years after the date you defaulted on the account, whichever date comes first.

Bankruptcy Record Retention by Equifax

Equifax’s policy for retaining bankruptcy information is a tad more challenging to decipher due to their recent website redesign. However, it’s generally understood that Equifax retains bankruptcy information for six years from the date of discharge, regardless of the province you live in. Equifax’s treatment of consumer proposals is similar to TransUnion’s.

A Balanced Perspective on Bankruptcy

While it’s true that bankruptcy will negatively impact your credit report for a certain period, it’s essential to explore the reasons behind considering bankruptcy. If your payments are already late or missing, your credit report will reflect this, and you may already have poor or no credit. In such cases, bankruptcy could be the first step towards rebuilding your credit rather than the end of it.

In Conclusion

Navigating the landscape of credit reporting in bankruptcy can be complex, but understanding the process can empower you to make informed decisions about your financial future. Whether it’s assessing the impact of bankruptcy on your credit report or exploring ways to rebuild your credit post-bankruptcy, knowledge truly is power. So, the next time you find yourself asking “What is the Credit Reporting Process For A Bankruptcy?”, remember, you’ve got the answers right here.

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