Consumer Proposal appears Bankruptcy in Credit Report.

MattP22127 wrote: ↑ Hello,

I had a rough financial time in past and did a Consumer Proposal in November 2017. I paid off all the debt in June 2019 and got the Certificate of Performance for Consumer Proposal.

I saw the TrasnUnion report now and it states that I have a Bankruptcy in Public Record section. Is this normal or was a mistake done?

I wrote an email to Insolvency Counselor - A Farber and Partners, and they told me that the Consumer Proposal does appear as Bankruptcy in Credit File.

Did someone else go through the same experience?

Now, I am desperately trying to re-establish credit and applied to Capital One for a Secured Mastercard - but it did not get approved online and they said they will send me a letter in mail.

I live in Montreal and work as an IT contractor. I make good money.

Have a mortgage to take in March 2020 for Condo I booked in June 2017 - now I do not think it would be possible.

Any suggestions would be much appreciated to improve credit.

Thank you.
Matt

robsaw wrote: ↑ Consumer Proposal / Bankruptcy = effectively the same in terms of credit reporting but here is what the Credit Counseling Society says:

"One of the worst things you can possibly do for your credit is to file a consumer proposal or file for bankruptcy. Both have the same effect on your credit and typically remain on your credit reports for roughly the same length of time (a consumer proposal typically takes around 5 years to pay off and then the record lasts on your credit report for another 3 years after that. So it’s normal for a proposal to impact someone’s credit for around 8 years – even with a credit repair program. Bankruptcy payments last for 9 to 21 months. After that, the record stays on your credit report for 6 to 7 years depending on your province. So a first-time bankruptcy can impact your credit for 7 to 9 years).

People who sell proposals will usually split hairs about the difference in how a proposal is reported on your credit reports versus a bankruptcy. Technically, debts included in a proposal will report as an R7 (really bad) on your credit reports and debts included in a bankruptcy will report as an R9 (the very worst). But this is only half the story. The other half is that your credit report also displays a special warning notifying creditors that you have become insolvent and have received court ordered protection.

In the eyes of the court system, the credit reporting system, and banks, consumer proposals and bankruptcies are very close to the same thing: they are seen as insolvency. The difference in the way the two are reported on your credit report is so small that a lot of lenders can’t actually tell whether you actually filed a consumer proposal or bankruptcy. From a bank’s or credit union’s point of view, they’re not interested in splitting hairs to figure out the difference. To them, both mean the same thing: instead of repaying your debts as you initially agreed to, you sought court protection and only repaid a small portion of what you owed. You may have had some very good reasons for becoming insolvent, but even for the most compassionate banker, it’s very hard for them to help you until the record of your insolvency falls off your credit report.

Obtaining credit after filing a consumer proposal or bankruptcy is a huge problem for a lot of people. There are things you can do to try and restore your credit score as quickly as possible without paying credit repair companies thousands of dollars, but until the record of your insolvency is removed from your credit reports, obtaining credit can often be challenging."

MattP22127 wrote: ↑Hello all,

I am really grateful to all of you. There is really light at the end of the Tunnel.

Have a great day ahead.

-Kind Regards,
Matt

ToniB1 wrote: ↑ ...
Also, I wanted to mention, the trustee or whatever you used mustve screwed you because you coulda done bankruptcy and at least pay much less to the creditors. To pay in full and to come to almost the same result, being having a bankruptcy on your record, the CP wasnt worth it.

And dont worry! Everyone makes mistakes but life goes on and things will get better! Its just going to be a little more expensive for you to obtain credit or mortgage, thats all.