How Long Does Debt Settlement Stay on my Credit Report?

How Long Does Debt Settlement Stay on my Credit Report?

If you have ever had issues with your credit, you may have experienced how those issues can make it difficult for you to get a loan for several years after the fact. If you have gone through a debt settlement process such as a bankruptcy or consumer proposal, you may ask how long that debt settlement will stay on your credit report.

In the case of a bankruptcy, a record of this will remain on your credit report for seven to ten years from the date of discharge depending on the kind of bankruptcy that it was. In the case of a consumer proposal, a record will remain for seven years from the date of the last payment.

Choosing Between Bankruptcy and Consumer Proposal

The main difference between a bankruptcy and a consumer proposal is that a bankruptcy dissolves your debts instantly however you may be required to give up certain assets like your car to help repay some of what you owe. With a consumer proposal, you will get to keep your assets and a fixed repayment plan will be negotiated between you and your creditors.

Because a consumer proposal is a lengthier process, this form of settlement will take a longer time to clear off your credit report from the start of the process, however depending on your situation, it may be worth it. If you are considering either bankruptcy or consumer proposal, it is recommended that you sit down with a professional debt counsellor or attorney to better understand your options.

Can I Still Get a Mortgage if There is a Debt Settlement on by Credit Report?

If you have a record of a debt settlement on your credit report getting a mortgage – or any type of loan for that matter – is going to be more challenging. There are however a few things you can do to help yourself including:
Check your credit report. In Canada, the two main credit bureaus that record credit information are TransUnion and Equifax. Get copies of your credit report from each of these organizations and check to see that the information and dates on them are accurate. If you notice a mistake (yes, they can and do make mistakes!) contact them immediately to get it resolved.

Keep up with your debt repayments. If you have been making repayments on your debt in full and on time, this can be a good signal to a potential lender and it will increase your chances of being able to get a loan.

Talk to your mortgage broker. The truth is that if your credit is bruised, getting a loan from a traditional lender may not be in the cards. There are alternative lenders out there that can help, but you’ll want to talk to a mortgage broker to make sure you find a reputable one.

If you have a record of a debt settlement on your credit report and need help with borrowing, call Matrix Mortgage Global today. We would be happy to sit down with you to discuss your options.

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