We frequently get asked how bankruptcy effects a credit rating.

According to Equifax, a bankruptcy gives you a R9 rating and it stays on your record for 6 years after discharge for a first time bankruptcy and 14 years for multiple bankruptcies. The ratings range from a 1 to a 9. 1 being the best and 9 the worst. Each time a payment is late your credit rating gets worse, for example from a R1 to a R2 when one payment is late. There is also a note on your file about the bankruptcy. This note is purged from your record 6 years after discharge.

A consumer proposal gives you a rating of R7 and is on your record for 3 years after it is paid in full. If you are concerned about faster improvement of your credit report, a consumer proposal can give achieve that objective.

The important note is that if you are behind on your bills, you already have negative notes on your credit rating. You need a plan to deal with your situation before creditors take you to court and garnishee your wages.

Call us at 310-PLAN to develop a plan that’s right for you.