Hi Tom. Based on anecdotal evidence Equifax may purge the bankruptcy after seven years, but TransUnion doesn’t start counting the time until you are discharged, so if you are not discharged it could remain on your TransUnion credit report for a long period of time.

Your best option will be to contact your original trustee and determine what will be required to go to court and obtain your discharge.

I declared bankruptcy nearly seven years ago. At the time it was determined that I had a minor surplus of income, even though I could barely get by with all my commitments. I followed all my duties but couldn’t pay the nearly $10,000 required to have my bankruptcy discharged.

My question is, how long will the undischarged bankruptcy remain on my credit history?

Thank you.

Hi Matt. Some creditors use the term “included in bankruptcy” and other simply put “written off”, but for all practical purposes they both mean the same thing: you no longer owe that money. I suspect that the lender doesn’t know how to read a credit report (which is a common problem). I have two suggestions:

First, check your credit report with TransUnion, because it may have different information, and that may be the credit bureau the lender is using.

Second, ask the lender which item is unresolved. That may help define the exact issue, allowing you to take steps to correct it.

Thanks

Hi Paul. This is a difficult question to answer, because it depends on how each creditor reports to the credit bureau. Many creditors, when they receive notice that you have filed a proposal, will code the account as “Included in Proposal”, and that’s it; there is no further reporting. So, if you are in a five year proposal, that account would be purged six years from the date the proposal is filed, because that is the last activity date reported by the creditor. Some creditors may report the date the proposal is accepted, or even the date the proposal is completed, in which case the individual note from that creditor will appear on your credit report for six years from the date of the last activity. To find out how each creditor is reporting, you can look at the “last activity date” on your credit report.

The note about the proposal itself, in the “legal items” section of your credit report, will be purged three years after the completion of your proposal.

The more important question is “how does this impact whether or not I will be able to borrow in the future?” The answer is that there is not just one factor that influences your credit score. A creditor that chooses to report a proposal for six years after the date of completion will have a minimal impact on your credit score, because the most significant component of your credit score is the amount of debt you have, which after the proposal is zero unsecured debt. Other important factors include your income, how long you have worked at the same job, how long you have lived at the same address, and what other steps you have taken to rebuild credit. Because of all of these other factors a “long reporting” creditor is generally not a concern.

Please help me figure this out…
Paul.

Hi Lori. There is no time limit for the reporting of a second bankruptcy on your credit report.

So, for example, if you went bankrupt in 2000, and then filed a second bankruptcy in 2015, the standard practice for the credit reporting agencies in Canada would be to show both bankruptcies on your credit report for 14 years from the date of the discharge of your second bankruptcy.

That’s one of the reasons why we often recommend that instead of filing a second bankruptcy it may be wise to consider a consumer proposal, because a consumer proposal only appears on your credit report for 3 years from the date of completion, regardless of whether or not you had a prior bankruptcy.

Can you please clarify the rules surrounding multiple bankruptcies? Do they need to occur within the same time frame? ie there is already a bankruptcy on your credit record and before the time limit (6 years) passes there is a second bankruptcy? or is it that if a second bankruptcy occurs anytime in your lifetime it will remain on your record for 14 years?

Thanks
Lori

Each employer is different. Most employers don’t do credit checks on new employees, unless it’s a financial services business where credit may be an issue. Presumably employers would only use one credit reporting agency or the other, since other than the specific example you mention, the information is very similar on both reports.

If I was applying for a job where a credit check was important, my strategy would be to:

1. get my credit report from Equifax (at the end of the six years) and provide a copy directly to the prospective employer. Perhaps by providing it to them directly they will be less inclined to pay the fee to order your credit report directly.

2. you could explain to your prospective employer that while you were bankrupt many years ago, you have had no problems since, and you have no debt, have re-established credit, and therefore would be an excellent addition to their organization, as your past experience will make you a better employee.