If a Consumer Proposal is not approved by a simple majority of creditors ( i.e. 50% + 1 ), then the Proposal fails. The Trustee has 15 days to call another meeting of the creditors and the debtor to make another proposal. If the second proposal fails to get a simple majority of the creditors, the debtor is officially declared Insolvent. To be insolvent, means you cannot meet your financial obligations when they become due. Therefore, if you are insolvent, you are bankrupt.

All Consumer Proposals have a maximum period of 5 years but can be established for a shorter period. Equifax's POLICY is that all Registered Consumer Proposals will purge from the system 3 years from the last date paid. For example, if a Consumer Proposal is for 5 years and all payments are made as agreed, the Consumer Proposal will remain on the system for a total of 8 years ( 5 + 3 ).
TransUnion's POLICY is that all Registered Consumer Proposals will purge from the system 3 years from the date the proposal was satisfied.

Equifax's POLICY is that a Bankruptcy will purge from the system 6 years from the date of discharge if it is a first Bankruptcy. Subsequent Bankruptcies will purge from the system 14 years from the date of discharge. An assignment in Bankruptcy can last as little as 9 months until the date of discharge or as per the September 2009 amendments to the Bankruptcy and Insolvency Act, can last as much as 21 months until the date of discharge. Therefore, under the worst case scenario, a Bankruptcy will purge from the system 7 years + 9 months ( 6 years + 21 months ). In a subsequent Bankruptcy, it will purge from the system 15 years + 9 months ( 14 + 21 months).

TransUnion's POLICY is that a single Bankruptcy in ON, PQ, NB, PEI, and NL will purge from the system 7 years from the date of discharge. In all other Provinces/Territories, the Bankruptcy will purge from the system 6 years from the date of discharge. Subsequent bankruptcies will purge from the system 14 years from the date of discharge.

A Consumer Proposal will only be on your record for three years, not like in bankruptcy which is 6. If you got a Consumer Proposal then you must have done it through a Trusties office. They would be the best ones to answer your question. Let us know the answer.

A Consumer Proposal failing does not automatically lead to Bankruptcy. But Bankruptcy may be the natural next step.

I am a mortgage agent in ontario and have seen many credit reports (including reports with bankruptcy and consumer proposal), while they look very similar they do not always look the same.

In either situation (bankruptcy or CP) it will show under public records section, however a consumer proposal will usually show as a consumer proposal and not a bankruptcy. How the various companies report it varies by the debtor, it should show "included in bankruptcy" under the debt on the bureau, however this is not always the case especially with a consumer proposal. It would be advisable to keep your CP paperwork handy when applying for credit as this will show exactly what was included in the proposal and should be sufficient to satisfy most creditors that all debts were included (if all debts were infact included).

Jeff Aikman, Mortgage Agent (Ontario)
Dominion Lending Centres Mortgage Plus
647-216-2654
jaikman@dominionlending.ca
www.jeffreyaikman.ca

As you probably know, all Consumer Proposals fall under the Federal Bankruptcy and Insolvency Act. In order to be effective, the majority of creditors must agree to the Proposal, otherwise, if rejected, the debtor is automatically bankrupt. A Federal Bankruptcy judge then confirms the Proposal and all creditors must then abide by the conditions of the Proposal. One of the items that a bankruptcy judge considers is that a debtor must be better off under a Proposal than by declaring bankruptcy.

Unfortunately, you will not be able to remove the phrase "included in bankruptcy" as I explained above, all Consumer Proposals fall within the Bankruptcy and Insolvency Act. While a Consumer Proposal is not a bankruptcy, that is the phrase that both credit bureaus use to show a debt has been included in EITHER a Consumer Proposal or a Bankruptcy.

i have had a consumer proposal for the past 3 yrs, 2 yrs remaining, I'm trying to rebuild my credit, I want to know how a creditor included in the CP should report this to Equifax, The following is currently reported:
Bad debt, collection account or unable to locate
Included in bankruptcy
Closed by credit grantor
I am worried to see the word Bankruptcy on my report and want to know if I should try to get it removed

There is also a note on my Consumer Proposal that says Disposition unknown