When Does a Bankruptcy Clear from Credit Report?
The team at D. Thode and Associates Inc., are here to answer your questions about credit reports, consumer proposals, and bankruptcy.
What is credit reporting and how does it affect me?
In Canada there are two major credit reporting agencies; Equifax and TransUnion. Most people commonly refer to these agencies as the credit bureaus. Credit reporting agencies do exactly that: they report credit history. They can also be referred to as an information service as they provide copies of your credit report to potential lenders. This allows the banks and other lenders to determine how much risk they are taking when they loan you money.
Whenever anyone lends money, they are taking a risk that it will not be repaid. By reviewing your credit history, the lender can determine how risky you are and if they prepared to take that risk.
To get any significant credit, you need a good borrowing history.
Approximately once each month every major lender in Canada (the banks, credit card companies, finance companies) sends a report about their borrowers to the credit bureaus. Also, the federal Superintendent of Bankruptcy reports a list of everyone who filed a consumer proposal or bankruptcy to the credit bureaus, as well as a list of everyone who has been discharged. The credit bureaus collect this information, summarize it, and sell it to their members, the lenders.
When you apply for credit, you normally sign an application that provides the lender consent to access your credit history. Generally, this consent allows then access not only the first time you apply, but anytime afterwards as well, as long as your account is open. It is also this consent that allows the lender to provide the bureau information on your payments etc. once you have been approved.
How long does a bankruptcy stay on my credit report?
How long bankruptcy stays on your credit report in Canada will depend on the credit bureau that is reporting.
The largest credit bureau in Canada, Equifax, maintains this record on your credit report for a period from the date of your discharge or last payment:
• A first bankruptcy for six years from the date of your discharge.
• A second bankruptcy for 14 years.
TransUnion keeps a bankruptcy on your credit file for six to seven years from the date of discharge or fourteen years from the filing date (depending on provincial legislation).
At this point the bankruptcy will leave the credit report and you will need to start to rebuild your credit.
How long does a consumer proposal stay on my credit report?
How long a consumer proposal stays on your credit report again depends on the credit bureau that is reporting.
Since 2003, D. Thode & Associates has been helping individuals and families get through their financial difficulties. Our trustees are fully licensed in British Columbia and the Yukon to deal with all legal financial alternatives available including bankruptcy and consumer proposals. If you are having debt problems, we will assist you in understanding all options, your rights, responsibilities, and your protections offered through these alternatives, in order that you may make an informed decision on which alternative is best for you and your situation.
Contact us at 1-866-712-5353 or complete the attached form
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