The consumer proposal recovery timeline: what actually happens, and when.

A consumer proposal is a formal, legally binding offer to unsecured creditors, made through a Licensed Insolvency Trustee under the Bankruptcy and Insolvency Act. The debtor makes one affordable monthly payment; creditors agree to accept less than the full amount owed; and remaining eligible debt is legally forgiven once it's completed.

Per the Office of the Superintendent of Bankruptcy, the law caps the term at five years — the term of a consumer proposal cannot exceed five years — though many proposals are set for a shorter period depending on what's negotiated with creditors and what the debtor can actually afford.

Missing payments has a hard consequence, not a soft one: fall three monthly payments behind, or more than three months past due on a less-frequent schedule, and the proposal is deemed annulled by operation of law, at which point creditors regain the right to pursue collection unless a court has ordered otherwise or an amendment has been filed.

Equifax removes a completed consumer proposal three years after the client has paid off all the debts under the proposal, or six years from the date it was filed, whichever comes first. A proposal completed quickly clears sooner on the six-year filing-date backstop; one that runs close to the five-year legal maximum clears closer to that mark too.

This means the credit-report clock and the payment-completion date interact directly — finishing a proposal early doesn't just end the payments sooner, it can also move up when it clears the bureau, up to the six-year outside limit.

During the proposal, most new credit is difficult to obtain and the file shows the proposal as an active derogatory item. After completion, rebuilding typically starts with one or two entry-level products used consistently — the same re-establishment pattern covered in our re-establishing credit article. The proposal being visible on the file for up to three, or six, more years after completion doesn't mean a mortgage is off the table in that window — it means the file needs a clear, positive story built on top of it.

1. 01Confirm status — active, completed, or annulled — and get the Certificate of Full Performance if completed, the clean documentary proof the file was finished as agreed.
2. 02Check the filing date and completion date against the retention rule above to know exactly when the bureau line is expected to clear.
3. 03Don't assume lender or insurer eligibility timelines match the bureau's own retention timeline — the two run independently, and lender or insurer waiting periods can be shorter or longer than what still shows on the file.