How long does a consumer proposal stay on credit report in 2025?

Worried about how long a consumer proposal stays on your credit report? You’re not alone — and it’s a smart question to ask if you’re considering this debt relief option.

A consumer proposal can be a powerful way to take control of your finances without declaring bankruptcy. But like any solution, it comes with trade-offs. If you’re thinking about taking this step, here’s what you need to know: how a consumer proposal works, how it impacts your credit, and how to rebuild once it’s in your rearview.

Consumer proposal basics and how it impacts your credit in 2025

So, what exactly is a consumer proposal?

It’s a formal, legally binding agreement you make with your creditors, managed by a Licensed Insolvency Trustee (LIT). It lets you consolidate your unsecured debts into one affordable monthly payment — and in many cases, reduce the total amount you owe by up to 80%. The rest is forgiven.

In 2025, more Canadians are turning to consumer proposals as new debt relief options emerge.

If you qualify, a proposal could cover nearly all types of unsecured debt, including: credit card debt, unsecured lines of credit, bank overdraft fees, CRA tax debt, student loans (depending on age of loan), payday loans, and money owed to friends or family. Unsecured debt simply means there’s no collateral involved, unlike a mortgage or auto loan.

Advantages of consumer proposals in 2025

Here’s why more people are choosing this route, even when wondering how long a consumer proposal affects credit:

• Reduce your debt: You could shrink what you owe by as much as 80%.
• Avoid bankruptcy: A consumer proposal is a less severe, less damaging alternative.
• Stop interest charges: In most cases, interest stops the moment you file.
• Prevent wage garnishment: Your payment is fixed, even if your income increases.
• Protect your assets: You don’t have to give up your home, vehicle, or RRSPs.
• Silence creditor calls: Once filed, creditors must stop contacting you.

File sooner than later. The sooner your proposal is complete, the sooner the credit clock starts ticking.

Consumer proposal credit report duration in 2025

According to Equifax, a consumer proposal stays on your credit report for three years after your final payment, or six years from the date you filed — whichever comes first.

That means if you complete your proposal in two years, the note could be gone just five years after you filed.

As of 2025, some credit bureaus now offer online tools to help you track your report status and request corrections or removals. It’s a good idea to check your credit report regularly to confirm everything is accurate and up to date.

Boost credit after a consumer proposal in 2025

Having a consumer proposal on your credit report does affect your score, especially at first. Your credit rating helps lenders, landlords, and even employers understand how you manage your money.

But here’s the good news: that number isn’t permanent. Once your proposal is completed, there are clear steps you can take to rebuild.

Make timely payments

First off, make sure you’re paying all your bills on time. This includes your regular monthly bills, any remaining debt obligations, and any new credit accounts you open.

Timely payments are one of the biggest factors in improving your credit score. They show lenders that you’re financially responsible and committed to staying on track.

We recommend creating a calendar or using a bill-tracking app to set reminders. Knowing exactly when money is expected to come out of your account can help prevent missed payments, overdraft charges, or surprise shortfalls.

It also gives you peace of mind and full visibility into your cash flow.

Keep your credit usage low

Credit utilization (or how much credit you’re using compared to your limit) makes up a big part of your credit score.

Try to keep this under 30%. For example, if your credit card has a $1,000 limit, it’s best to stay below $300.

The same goes for your debt-to-income ratio: if your debt payments are taking up too much of your income each month, it can signal risk to lenders. Keeping both of these numbers in check not only boosts your credit but helps you avoid overspending and maintain financial stability.

Build up a positive credit history

Rebuilding credit takes time, but one of the best tools you can use is a secured credit card. This type of card works just like a regular credit card, except you pay a refundable security deposit upfront.

That deposit becomes your credit limit. Use it for small purchases — like gas or groceries — and make sure to pay it off in full every month. Over time, this shows credit bureaus that you’re using credit responsibly.

The steady, positive activity on your credit report helps move your score in the right direction.

Stay mindful of your spending

After completing a consumer proposal, it’s important to be intentional about your money. That doesn’t mean never spending, it means knowing where your money goes and creating a realistic, flexible budget.

Track your expenses to see patterns and look for savings opportunities. You might find unused subscriptions or recurring charges that don’t serve you anymore.

A good budget also gives you a full picture of your income and obligations in one place, making it easier to plan ahead and reduce stress.

And remember: budgets are living documents. If you overspend one week, don’t beat yourself up. Adjust and keep going. Building new financial habits takes time, and giving yourself grace is part of the process.

Avoid borrowing more money

It can be tempting to apply for a new loan — especially if you’re trying to make up for old financial struggles — but it’s usually not the best idea right after a consumer proposal.

Payday loans or high-interest personal loans often come with hidden fees or long-term consequences that outweigh the short-term relief. Even consolidation loans can be risky if you don’t qualify for a reasonable interest rate. They’re not always easy to get after a credit hit, and they may end up costing more in the long run.

Your best move is to focus on living within your means and avoiding new debt while you’re rebuilding—but if possible, try setting aside even a small amount in savings to start building financial resilience.

Get debt counselling

If you’re unsure where to begin or feeling discouraged, talking to a debt counsellor can make a huge difference. They can help you create a budget, prioritize your goals, and build a better relationship with money.

Just be cautious of companies that promise fast credit fixes or “erase your credit history” schemes. In 2025, these types of scams are still widespread and they target people trying to get back on track.

A legitimate debt professional will never overpromise or ask for large upfront fees. At Farber, our LITs and financial professionals are here to support your journey with personalized, judgment-free guidance.

There’s no quick fix to rebuilding credit, but there is a clear, manageable path — and we’ll help you take it.

Farber’s debt management support in 2025

If you’re thinking about filing a consumer proposal, you don’t have to go it alone. At Farber, we’ve helped over 200,000 Canadians since 1979 reduce debt and take control of their finances.

With a consumer proposal, we can help you cut up to 80% of your unsecured debt and design a plan that works for your life and goals.

From your first consultation to the final payment (and beyond), we’re with you every step of the way.

While a consumer proposal will stay on your credit report for three to six years, depending on when you finish paying it off, that doesn’t mean your credit is ruined forever.

With consistent payments, smart habits, and the right support, your financial life can recover — and thrive. If you’re ready to explore your options, we’re here to help. Start by booking a free consultation today.