If you’re considering a consumer proposal in Canada, you’ve probably heard it described as “up to five years.” But what does that actually mean month by month? Knowing the consumer proposal timeline in Canada changes how you plan and how quickly you can get your credit back on track.
This guide walks through every phase: filing, creditor voting, the payment period, your certificate of full performance, and what happens to your credit report afterward. Two worked examples show how the timeline shifts depending on whether you go aggressive (36 months) or take the full run (60 months).
Phase 1: Filing with a Licensed Insolvency Trustee (Day 0)
A consumer proposal is a formal, legally binding process administered by a Licensed Insolvency Trustee (LIT). You cannot file one yourself.
To qualify, your total unsecured debts must be under $250,000 (not counting a mortgage on your principal residence). If your debts are higher, you’d need a Division I proposal instead.
What happens on Day 0:
- You meet with your LIT, who reviews your full financial picture
- Together you design a proposal: pay back a percentage of what you owe, extended over a period you can actually manage
- The LIT files the proposal with the Office of the Superintendent of Bankruptcy (OSB)
- As soon as filing is complete, collection calls stop, wage garnishments stop, and lawsuits are paused
This automatic “stay of proceedings” is one of the most immediate benefits. The pressure lifts the day you file.
You’ll also need to provide a complete list of assets and liabilities, keep the LIT informed of any address change, and commit to two financial counselling sessions over the course of the proposal.
Phase 2: Creditor Voting (Days 1 to 45)
After filing, creditors get 45 days to review the proposal and decide whether to accept or reject it.
A meeting of creditors is only required if creditors holding at least 25% of the total proven claims request one within those 45 days. If no meeting is requested, the proposal is automatically deemed accepted at the 45-day mark.
If a meeting is called, it must happen within 21 days of being requested. Acceptance is decided by simple dollar-majority vote: if creditors holding more than 50% of the dollar value of proven claims vote in favour, the proposal passes and binds all unsecured creditors.
After creditors accept, the OSB and any other interested party have 15 days to ask a court to review the proposal. If no review is requested, the court is deemed to have approved it. In practice, most consumer proposals move through this phase without a formal court appearance.
Timeline so far: roughly 45 to 60 days from filing to confirmed approval.
Phase 3: The Payment Period (Months 1 to 60)
Once approved, you begin making regular payments to your LIT, who distributes the funds to creditors.
The maximum term for a consumer proposal is 60 months (five years). You can structure payments as monthly installments or, if your situation allows, as a lump sum.
A few things you cannot do freely during this period:
- Take on new unsecured credit without disclosing the proposal to prospective lenders (your credit file shows the R7 rating automatically, so any lender who checks will see it)
- Miss three consecutive monthly payments, which triggers automatic annulment and restores creditors’ ability to collect
- Renew a mortgage at a new lender without that lender seeing the R7 on your credit report (most existing lenders will renew your mortgage as long as payments are current)
What you can do:
- Get a secured credit card and use it to start rebuilding payment history right away
- Ask utilities and service providers to report your on-time payments to the bureaus
- Build toward a stronger credit profile while the proposal is still active
The R7 Rating
During a consumer proposal, each affected trade line on your credit report gets an R7 rating. R1 is perfect, R9 is bankruptcy. R7 sits in between and indicates a formal arrangement to settle debts.
The R7 stays on each individual trade account until the negative information ages off, typically 6 years from the last activity date or the filing date. The more important timeline is the public record entry, which follows the bureau-specific rules below.
Phase 4: Certificate of Full Performance
When you make your final payment and complete both mandatory counselling sessions, your LIT issues a Certificate of Full Performance.
Send a copy to both Equifax and TransUnion. Do not assume they update automatically; proactively providing the certificate speeds up the process and confirms your proposal end date.
Keep every document related to your proposal permanently. Future lenders, including mortgage lenders, may ask for proof of completion years after the fact.
Phase 5: Credit Report Aftermath
This is the part that matters most for rebuilding, and the timelines are specific enough to be worth knowing precisely.
Equifax Canada
A consumer proposal is removed from your Equifax credit report 3 years after you’ve paid off all the debts under the proposal, or 6 years from the date it was filed, whichever comes first.
TransUnion Canada
TransUnion Canada follows a parallel rule: the consumer proposal and all accounts satisfied through it are removed 3 years from the date you completed the proposal, or 6 years from the date you defaulted on the underlying accounts, whichever comes first.
Note the slight difference: Equifax counts six years from the filing date, while TransUnion counts six years from the original default date on the accounts. If you had been missing payments for a year before filing, TransUnion’s six-year clock started earlier.
Two Consumer Proposal Timeline Scenarios
Scenario A: Aggressive 36-Month Payoff
You file in January 2026 with $40,000 in unsecured debt and negotiate a proposal to repay $24,000 over 36 months (roughly $667/month).
| Milestone | Approximate Date |
|---|---|
| File with LIT | Jan 2026 |
| Creditors’ vote / proposal confirmed | Feb/Mar 2026 |
| Final payment | Jan 2029 |
| Certificate of Full Performance | Feb 2029 |
| Equifax clears (3yr post-completion) | Feb 2032 |
| Equifax clears (6yr from filing) | Jan 2032 |
| Equifax drops off | Jan 2032 (6yr rule is sooner) |
| TransUnion drops off | Similar range depending on the default date |
Total time from filing to clean report: roughly 6 years. But the faster you complete payments, the sooner the 3-year post-completion window opens. In this scenario, the 6-year-from-filing rule hits slightly sooner than the 3-year post-completion rule (Jan 2032 vs. Feb 2032), so Equifax clears at the 6-year mark.
When the 36-month plan makes sense: your income is stable, you can absorb a larger monthly payment, and you want to minimize the total number of years affected. It also gives you a full two-plus years of clean credit history before the proposal drops off, which matters for mortgage lenders.
Scenario B: Full 60-Month Term
Same $40,000 debt, same filing date, but you negotiate $18,000 repaid over 60 months (about $300/month).
| Milestone | Approximate Date |
|---|---|
| File with LIT | Jan 2026 |
| Creditors’ vote / proposal confirmed | Feb/Mar 2026 |
| Final payment | Jan 2031 |
| Certificate of Full Performance | Feb 2031 |
| Equifax clears (3yr post-completion) | Feb 2034 |
| Equifax clears (6yr from filing) | Jan 2032 |
| Equifax drops off | Jan 2032 (6yr rule is sooner) |
Equifax still clears in January 2032 regardless of when you finish paying, because the 6-year-from-filing rule hits before the 3-year post-completion window does.
When the 60-month plan makes sense: your cash flow is tight, you need the lower monthly payment to stay current and avoid annulment, and you can accept a longer reporting window in exchange for financial stability.
The takeaway: with a 60-month proposal, you’re still in the payment period when Equifax purges the public record. That means you could technically get a clean Equifax report before you’re even done paying.
What Life Looks Like Year by Year
Year 1 (filing through the first months of payments): The immediate relief is real. No collection calls, no garnishments. Your credit score takes a hit, but it was likely already damaged before you filed. Focus on making every payment on time and getting a secured credit card to start fresh trade lines.
Year 2: You’re in rhythm. If you got a secured card at filing, you now have 18 to 24 months of clean payment history building. That history will count. Some borrowers can access small installment loans from alternative lenders at this stage, depending on the lender’s review. You may qualify for financing depending on the lender’s review.
Year 3: If you’re on a 36-month plan, you’re approaching the finish line. If you’re on 60 months, you’re halfway. Either way, two years of positive payment history means some lenders start treating you as a rebuild case rather than a risk.
Year 4 to 5 (60-month plan): The proposal is winding down. Many people have secured a car loan or are rebuilding savings. Your Equifax record may clear before your final payment if you filed in the early years of the term.
Post-completion: Once the certificate is issued, the 3-year post-completion window starts on Equifax if it hasn’t already been wiped by the 6-year rule. Update both bureaus with your certificate. Start working toward the “two plus two plus two” benchmark that most mortgage lenders use: two new credit facilities, $2,000 to $3,000 credit limits each, and two years of clean payment history.
Borrowing During and After a Proposal
Banks and prime lenders will not extend new unsecured credit while your R7 is active. However, alternative lenders assess risk differently. During the late stages of a proposal or shortly after completion, you may qualify for a personal loan, depending on the lender’s review, primarily based on your income and payment history over the last 12 to 24 months.
If you need to consolidate remaining debts or cover a gap after your proposal wraps, understanding your debt consolidation options can help you choose the right path.
Building credit through responsible borrowing is one of the fastest routes to a stronger score. Using bad credit loans to rebuild gives you a structured approach for the years after your certificate arrives.
For Canadians earlier in the debt management process, a broader look at reducing and managing debt covers the full range of options, from informal negotiation to formal insolvency routes.
If you’re approaching the end of a proposal or have recently received your certificate and need to explore borrowing options, Lend For All’s personal loans connect you with lenders who assess post-proposal borrowers on their current financial picture, not just their history. Alternative lenders may qualify you based on their review.
Frequently Asked Questions
Can I get a mortgage during a consumer proposal? Most existing mortgage lenders will renew your loan during the proposal period if your payments remain current. Getting a new mortgage or switching lenders while the R7 is active is difficult. Most lenders require that the proposal be completed and that there be a period of clean credit history before approving a new mortgage.
What happens if I miss payments? Three missed monthly payments (or a payment that is more than three months overdue on a less-frequent schedule) trigger automatic annulment. Your creditors regain collection rights unless a court has ordered otherwise. The proposal can be revived under specific conditions, but it requires quick action.
Does a consumer proposal affect my spouse? A consumer proposal only affects your individual credit report. Your spouse’s credit is not impacted unless they are a co-signer or joint debtor on accounts included in the proposal.
Can I keep my assets? Yes. One of the key differences between a consumer proposal and bankruptcy is that you keep your assets in a proposal. You are not required to surrender your car, home equity (above secured debt), or savings.
How does a consumer proposal differ from a debt consolidation loan? A debt consolidation loan restructures what you owe but does not reduce the principal. A consumer proposal often settles debts at less than face value, making it a stronger option when your total debt load exceeds what you can realistically repay in full.
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