Frequently Asked Questions

About Credit Bureaus and Credit Ratings

What happens to my credit rating if I take protection from my creditors by filing bankruptcy or a consumer proposal?

Many people who are considering protection from their creditors already have a poor credit rating. Many of the people that we talk to already have bad credit reports or are in a position where their creditors will begin reporting poor credit histories for them. The bad ratings remain on their credit report. They are not able to get new credit and may already have had their credit cards suspended.

Filing an assignment into bankruptcy will result in an erosion of a perfect credit rating to an R9, Filing a proposal or an orderly payment of debts arrangement will result in an erosion of a perfect credit rating to an R7. These ratings along with any other negative creditor comments will remain on the credit history for some time (bankruptcy – six years; proposal and orderly payment of debts -four years after proposal has been finalized). Some credit bureaus will leave second or third assignments on their records longer.

It is important to note that filing bankruptcy or filing a proposal does not clear all the negative comments about your credit history that were present on the credit bureau prior to the date that you filed the proposal or the assignment.

If you are careful how you conduct your finances in the future your credit rating will only improve. The ability to obtain and to use credit after you are discharged or have completed your proposal will depend upon your new credit history and your ability to convince a potential lender that you have learned from your prior mistakes.

Part of building up your new credit history is making sure that your old credit history is correct. We recommend that you request and review your credit history once a year and that you communicate any errors that may be on your credit history directly to the credit bureau for correction.

Will bad credit reports on my Canadian credit bureau affect my ability to get credit in another country?

We are not certain if the credit bureaus share credit information internationally. Remember that if you get new credit in the another country, you will be asked to complete a statement about your debts. You can not legitimately exclude your bad Canadian credit situation.

Will filing Bankruptcy really “Wipe My Slate Clean”?

NO. Your credit history remains as is for at least six years from the most recent entry on the history. Nothing any Trustee can do will remove the negative comments on your credit history.