Buying a home after bankruptcy? What to expect | Ingrid McGaughey | Mortgage Broker

Buying a home after bankruptcy? What to expect…

Buying a home after bankruptcy? What to expect | Ingrid McGaughey | Mortgage Broker

What you need to know about buying after bankruptcy

If you’ve declared bankruptcy in the past, know that you’re not alone.  Further, know that your situation is nothing to be ashamed of.  No one wants to declare bankruptcy; sometimes, it may be the only solution to a difficult situation.  If you’re now thinking of buying a home after bankruptcy, you may be wondering how it would work.

I see lots of clients after their bankruptcy has been discharged or their consumer proposal has been completed. They’ll often tell me they dropped in at their bank branch or another mortgage broker, but they have either been turned down or found they were given the wrong information that resulted in last minute crises. (Pet peeve alert!)  This may give the mistaken impression that there is nothing to be done.  Don’t be discouraged!  You can and will put this behind you. The right planning and commitment will get you there.

You CAN get a mortgage after bankruptcy. Here’s what you need to know.

Buying a home after bankruptcy is not the same as buying a home for the first time with no credit issues. There are two main factors:

  • How long ago was your bankruptcy discharged, or your consumer proposal completed?
  • How long have you been re-establishing your credit, and how extensive is that credit?

The mortgage options available to you depend on the answers to these questions.  In a nutshell, you will be looking at either a mainstream or alternative lender (aka “B” lender).

Mortgage after bankruptcy with a mainstream or “prime” mortgage lender

With a prime lender, you have the luxury of being able to purchase a home at the best rates available. In addition, a mainstream lender will allow you to use a down payment of as little as 5% of the purchase price of the home.  That said, if your down payment is less than 20% of the home’s purchase price, lenders will require default insurance. This is through either CMHC or Genworth, and the fee charged will be added to your mortgage amount. The cost is calculated on a sliding scale: 1.80% – 3.60% of the amount of your mortgage.

In order to qualify with a prime lender after bankruptcy, you need to fulfill the following criteria:

1.  The down payment must be from your own resources. The funds can be in a savings account, an RRSP, investment account, and so on.   You need to have at least 5% available for the first $500,000 of your purchase, 10% for any amount over $500,000.   However, 10% of the purchase price is better, and will give you more options.

2.  To work with a prime lender, you need to wait for a minimum of two years after discharge of your bankruptcy.  Please note that this is a best case scenario, not a sure thing.  Each lender has their own criteria.  A few will do a mortgage two years after discharge. Several more require three years, and some want you to wait five or six.

3.  To work with an “A” lender after bankruptcy, you must also be able to show at least two years of solid, re-established credit.  A little more about this point…  As soon as your bankruptcy is discharged, you should be focusing on rebuilding your credit.  Ideally, what you want to end up with, is a two year track record, minimum, for each piece of credit (also known as a “trade line”) you have.  The credit can be made up of two major credit cards with a limit of  at least $2000-3000 each, an unsecured line of credit with at least a $2000 limit, a loan or car lease, or some combination of those.  Unsecured credit is best, and you need to have at least two trade lines.  Every single credit transaction following your bankruptcy has to be absolutely perfect.  Make your payments on time. And, in the case of credit cards and lines of credit, keep your balance at a maximum of 30% of the limit on the card.   For more information on credit, see my articles here and on re-establishing credit after bankruptcy, click here.

Mortgage after bankruptcy with an alternative mortgage lender, or “B” lender

An alternative lender will work with you as early as one day after your bankruptcy discharge, and with little or no re-established credit.   However, in exchange for this flexibility, what they will look for is the following:

1.  Your down payment will need to be at least 20% of the purchase price of your home.  If you have 25% down, or more, that will give you more options.  In Mississauga, Etobicoke, and the Greater Toronto Area, this can be a sizeable chunk of cash, so you’ll want to be prepared.

2.  Your costs will be higher with a “B” lender than with a mainstream lender.  First, your interest rate will be a bit higher. How much higher depends on the “big picture” of your overall financial situation, how large your down payment is, and how good your re-established credit is.  You can expect to add at least one percentage point over mainstream rates, possibly more.  Second, you can expect to pay a lender commitment fee. This is typically around 1% of your mortgage value – similar to the Genworth or CMHC mortgage insurance fee mentioned above.  If your down payment is more than 20%, you might be able to add the commitment fee to your mortgage rather than paying this out of pocket, but this is up to the lender.

3.  You’ll need to obtain a full appraisal before the lender will sign off on the mortgage.  This means that, when you’re writing up your Offer to Purchase, you need to include enough time in your “financing clause” to allow for the appraisal to be conducted, written up, and reviewed by the lender.  Ideally, you should have at least a 5 business day financing clause.

Keep in mind that your alternative mortgage lender or B lender is exactly that. It’s an alternative, or a stepping stone to get you where you want to go.

If you focus on rebuilding your financial situation and improving your credit, usually in 1-3 years you can move back into mainstream territory.

Discuss your options with a mortgage professional

If you do wish to purchase a home, and you have a bankruptcy or consumer proposal in your past, the most important recommendation I have is not to rush into anything.  Same goes for re-financing a mortgage after bankruptcy.  Talk to a knowledgeable mortgage professional who is experienced in helping people get a mortgage after bankruptcy.  They will help you to understand and evaluate your options, and figure out which one is best for you.

If you’d like to do more reading about credit, check out my articles on Establishing Credit and Repairing Bruised Credit.   And I’m always happy to answer any questions you might have for me, with no obligation.  Please don’t hesitate to get in touch with me if you’d like to confidentially talk about your own situation.

I wish you happy home buying!

Photo credit: [c] Huseyn Naghiyev for 


    October 1, 2013 REPLY

    […] read more about getting a mortgage after bankruptcy, take a look at my article “Buying a Home After Bankruptcy? What to Expect”.  For more information on credit, check out these articles within my website: Credit 101, […]

    November 11, 2013 REPLY

    […] a final stamp of approval on your property and everything else.   (For more details on “what to expect if you’re getting a mortgage after bankruptcy, click here.)  Better to lose out on a property than to lose your hard-earned cash because your financing […]

    October 21, 2014 REPLY

    hi, We are thinking of purchasing a home next year, we have filed for bankruptcy in the past but we should be okay by next year. Please provide some info.

      October 21, 2014 REPLY

      Hi Virginia, thanks for the question!

      Ideally what you should do is to sit down with a mortgage professional who’s experienced in working with folks who have a past bankruptcy, so that you can discuss the specifics. This means things like discussing the details of your bankruptcy, whether you have re-established credit, and how much re-established credit you have. That will help determine your options in terms of which mortgage lender(s) would be appropriate, and from that, we’d know how much, percentage-wise, your down payment needs to be. Your job stability and/or sources of income would be just as important. I’d recommend developing a game plan as soon as possible so that you can hit the ground running when you’re ready.

      Let me know if you would like to set up a phone call.


    February 26, 2015 REPLY


    My boyfriend was just discharged from a second bankruptcy and would like to work on making his credit score good. What all suggestion you have. He is paying his phone bills on time. He has a steady source of income and have a secured credit card which he is paying on time as well.

      February 27, 2015 REPLY

      Hi Supriya,

      Thanks for your question! A second bankruptcy makes things much more challenging… For one thing, it will stay on his credit bureau / credit report for a much longer period of time than a first bankruptcy – 14 years. Second, he is considered to be in a much higher risk category because he’s declared bankruptcy twice. So what he should focus on will include not only making his credit absolutely perfect, but also building up a much bigger down payment (35-50% would be ideal). This is because the lenders will want to see that he has more “skin in the game”, so to speak, which will help balance out the risk created by his past credit history. As far as the credit going forward, he should look into adding a second credit card. The lenders will want to see at least two major credit cards with a minimum of 24 months perfect credit history. He needs to use the cards every single month, but pay them off every single month too (or if he has to carry a balance, it must be less than 30% of the limit, and he must never miss a payment). His credit report will be scrutinized very carefully – lenders will turn down any application that shows late payments after a bankruptcy. Check out my articles under the Credit 101 tab ( and in my blog ( for more details.

      Best of luck –

    March 29, 2015 REPLY

    My husband has been discharged from bankruptcy 16 months and there was a house involved. My question is he able to get a mortgage after his 2 years? And also how much of a down payment should he ideally prepare for in purchasing of a new home. We’ve been told that he will need 20% down to get a second mortgage? This is In Alberta.

    Thanks in advance

      March 29, 2015 REPLY


      Thanks for your question, it’s a good one! It is indeed possible to get a mortgage now, though it is not a “for sure”. The big things that the lenders will look for are:

      1) how much re-established credit you have (and by the way: NEVER slip up on making your payments on anything, following a bankruptcy, or it will create big problems for you)
      2) how your income is structured, how stable it is, and how predictable it is (e.g. salary versus part-time work)
      3) how much of a down payment you have and where it is coming from (e.g. gift from family is not as good as built-up savings of your own)

      For an “A lender” you would need to show AT MINIMUM 24 months of solid, perfect credit on at least two trade lines, such as major credit cards with a limit of $2000 or more (but that you don’t have a balance of more than about $500 on). See my articles under the Credit 101 tab for more details. If there was a mortgage written off during the bankruptcy, it will make your situation more challenging with the A lenders, and you might need to continue working on your credit for 36 months or longer, and have a down payment of 10% or greater.

      So in your case, I’m guessing you don’t have the 24 months of re-established credit yet, so plan B would be to look at the B lenders. With them, they are willing to overlook the credit history somewhat, but they will want to get a bigger down payment (at least 15-20%) and the rate will be a bit higher. They set the rate and required down payment depending on the full financial picture and the location and type of property you’re buying.

      Feel free to get in touch if you would like to talk about your situation in more detail.

      All the best,

    April 10, 2015 REPLY

    i was discharged from bankruptcy 5 years ago. i just applied for mortgage with 10% down through mortgage broker and non of them give me the mortgage

      April 10, 2015 REPLY

      Hi Nathalie,

      Thanks for your comment. I’m sorry to hear your mortgage didn’t work out with the other mortgage broker! Did he/she explain why?

      Questions I would ask are:

      – is your 10% down payment from your own resources, or was it gifted? Showing that it came from your own resources is preferable, post-bankruptcy…
      – how much re-established credit do you have? Something such as at least 24 months of perfect credit on two major credit cards, with limits that are now around $2-3000, is needed if you want to go with a mainstream lender. If you have less than this, you can get it done with a bigger down payment – 15% or more – and an alternative lender.
      – what is your income situation? For example, are you in a stable, salaried situation, or are you part-time or contract?


        April 30, 2015 REPLY

        Yes bought a car after my discharge have to credit cards with high limits but problem with down payment

          April 30, 2015 REPLY

          Full time job with same company for 18 years

    April 11, 2015 REPLY

    Hello, I’m about to pay off my consumer proposal early, by about 8 months. I’ve had a credit card the whole time I was on my proposal as well as a secured loan and cell phone and other bills in my name. All of which have been paid on time and paid off monthly.
    My question is, will that help on my credit rebuild or will only payments after my discharge help my credit score?

      April 19, 2015 REPLY

      Hi Wayne,

      Congratulations on paying of the Consumer Proposal early! That’s great. If you can get a letter from your trustee confirming your excellent track record and the early payout, that will help you for sure.

      As for your credit score, the older a credit card is, and the higher the unused limit, the more it helps you. Keeping the payments on everything absolutely perfect will improve your credit rating as well.

      In terms of getting a mortgage, the mortgage lenders will evaluate you based on how long it’s been since the Consumer Proposal was paid off, as well as how much re-established credit you have. So, if you want to get a mortgage immediately following the CP payout, you’re still going to have to look at an alternative lender initially, even if you have had your credit card and loan for a substantial period of time. However, the alternative lenders will take a good track record on those debts into account, when setting your rate.

      With the mainstream lenders, you will need to have your consumer proposal payout at least two years behind you. At that point, your credit card and loan will help you since they will show more than two years history.

      I hope that helps. If you have more specific questions, please feel free to email / call me.


    April 18, 2015 REPLY


    Its been 3 years since my discharged on my second Bankruptcy I’ve been trying to build my credit i have applied for secured credit card but i haven;t been able to get one, I was wondering about the loans you can get from your bank to buy RRSP what would my chances be on acquiring one, another question i have is i claim bankruptcy and at the time i did i was separated from my wife we did endup getting back together she has a perfect credit and she wants to buy a house will my credit ruin her chances to buy a house and by the way i do have a full time job and make decent money maybe i haven’t been applying for a credit card in the right places or maybe this is normal but how can you build your credit when they don’t give you a chance.

    Thanks for your help

      April 19, 2015 REPLY

      Hi Jorge,

      After a second bankruptcy you are going to find it pretty difficult to get a mortgage on good terms until it disappears off your credit bureau. You will likely need to have a very significant down payment (35 – 50%). What happens is that not only is your current bankruptcy on your file for longer (14 years), but the original bankruptcy, even if it had disappeared off your credit bureau, now comes back and stays on the credit bureau for another 6-7 years. And, with two bankruptcies, you are considered very high risk.

      Building your credit is a smart thing to do; keeping in mind that following any bankruptcy, every single liability that you have, including cell phone bills, has to be paid with an

        absolutely perfect track record

      . You can’t afford even one late payment. Companies that will do a secured credit card (usually) are Home Trust and Capital One. You can also try Affirm Financial; they will do an unsecured card following a bankruptcy, although I’m not sure how they handle a double bankruptcy.

      In terms of RRSP loans, you would need to try your local bank or credit union. I just do mortgages. 🙂

      All the best,

    April 25, 2015 REPLY

    My husband was discharged from bankruptcy in July 2013, but he doesn’t have income. I’m planning to buy a house and I’m the person who get the mortgage. The house would be under my name, is my husband’s bankruptcy can affect me from buying the house?


      April 27, 2015 REPLY

      Hi Aurora, thanks for your great question. If you don’t need your husband’s income to qualify on the mortgage, then no, his bankruptcy would not affect you. What you’d need to do is buy the house in your name only, and get the mortgage in your name only. Your husband would have to sign a “spousal consent” document which just says that he is in agreement with your buying the property and arranging the mortgage without including him.
      Best of luck!

    April 29, 2015 REPLY

    Hi there I have been discharged for almost 6 years and can’t get approved for a house any help

      April 30, 2015 REPLY

      Hi Neil – sorry to hear that. If this is your only bankruptcy, then a few things come to mind as potential issues:

      – you need to have at least 24 months of solid, re-established credit
      – you need to show steady, proven income over the last two years or longer (such as with CRA Notices of Assessment for the last two years)
      – you need to have at least 10% down payment from your own resources, 15 – 20% if you’re going with an alternative lender
      – you need to try non-big-bank mortgage lenders who have a more flexible approach to lending (note: many of them are available only through a mortgage broker)

      If you’d like to talk further, please feel free to get in touch.

      All the best,

        April 30, 2015 REPLY

        Yes I working with same company for 18 years only 1 bankrupt bought a car after discharge and have two credit cards

    May 23, 2015 REPLY

    I have read your article and am wondering why my husband and I are having so much trouble getting a mortgage. We have been discharged from bankruptcy 6.5 years and have 6 years of re-established credit. We both make very good money, I am a nurse and he is self employed. We recently were preapproved for a mortgage but once an offer had been submitted the motgage insurance companies denied us? What more do we have to do?

      May 25, 2015 REPLY

      Hi Shawna, I’m not sure why you’re still having trouble. It sounds like you’re doing all the right things. Typically there can be a decline from the insurance company for three main reasons: 1) a mortgage was involved in the original bankruptcy, 2) your down payment is too small, or is not from your own savings (e.g. it’s a gift), or 3) the strength of your re-established credit isn’t enough / there are late payments post-bankruptcy that show on your credit report. Please feel free to get in touch with me and I would be happy to discuss your options in more detail, to see if I can help.


    July 10, 2015 REPLY

    […] If you want to know more about buying a home after bankruptcy, check out my article on what to expect, here. […]

    August 6, 2015 REPLY

    Hi Ingrid
    My wife and I have retired 7 yrs ago in Ontario and have not worked since. We had a joint bankruptcy 14 yrs ago and have reestablished credit. She has a locked-in company pension and has withdrawn all available cash from it and we both have government pensions. We are 72 yrs old and she is in bad health. We live in a house we bought in the country for $90,000 and put down $40,000 cash. Mortgage is $118/mo. Biweekly. We have one car that is essential due to our remoteness.

    Although we are paying all bills on time, I purchase all food on Visa and am almost maxed out. Our grandchild lives in another home we originally bought for our daughter for $135,000 and their rent pays the mortgage. We were counting on her buying it but that fell through and we dont have any equity in that home if we sold at a loss. Would we lose the equity in our principal home if we declared bankruptcy? Do we have a better alternative?
    Thank you.

      August 6, 2015 REPLY

      Hi Ed, so sorry to hear about your financial struggles. You should know that a second bankruptcy makes it extremely difficult for you to get any credit going forward. The old bankruptcy is added back onto your credit bureau and this would now follow you for 14 years rather than the 7 years with the old one. As such, declaring bankruptcy a second time would really be a last resort. Is there any possibility of you selling your existing home that you have equity in, and moving in with the grandchild who is renting your other place? That would free up a bit of cash for you and enable you to pay off your credit cards, share expenses, and avoid the second bankruptcy. If you’ve been helping your family for all this time, it would seem to make sense to have them take a turn helping you.
      Wishing you all the best…

    August 13, 2015 REPLY

    Hello, I went bankrupt 3 years ago and should be discharged soon. The CRA being my sole creditor, I never missed a payment with anyone else.

    My wife has sparkling credit, like I used to, and we have 50% to put down on a house. What kind of rates are we looking at?


      October 31, 2015 REPLY

      Hi Wondering Guy –

      Thanks for the question! It would be best for us to talk directly so I can better understand the specifics of your situation. However, in general, the B lenders look at a few things when establishing the rate they will offer. Down payment is one, and your 50% down is awesome. The second is your credit – specifically, how much re-established credit you have. In your situation they would consider both yours and your wife’s, but how much weight they give to each is based on how much income you’re both contributing to the qualification ratios. If you’re working but your wife isn’t, then your credit is more important than hers. Which brings me to the third piece, your incomes. If you have salaried incomes and easily qualify for the mortgage, your rate is better than if it’s purely a mortgage based on the equity in the home. I hope that helps a bit. And please get in touch if you’d like to talk further!
      Best –

    January 3, 2016 REPLY

    I have been discharged for several years but I did not start building my credit back until now. My company is in good standings and is making in the mid 6 figures per year. I would be coming into the mortgage with more than 25% down. I just paid cash for one vehicle 2014 and cash for most of a second vehicle 2013. The reason I did not pay cash for the entire second vehicle is because I wanted to get a 15k loan to start rebuilding my credit. The first payment comes out this month so I have not really started building my credit back yet. The lender was alternative that works through this car dealership and was ok with the loan because I had so much skin in the game. I am also getting a secured CC through Credit Union and a small loan from them as well to help speed up the rebuilding process. My question to you is, do you think that anyone would look at lending to me after another 6 month of credit rebuilding with 25% down 150k in household income last year between my wife and I and about 350k this year. This is my incorporated company, so I don’t work for anyone else.


      January 6, 2016 REPLY

      Hi Dale, thanks for your question! You can get a mortgage pretty much the day after bankruptcy, so the fact that you are several years out of bankruptcy is a plus. Additional strengths of your application are your good income and your 25% down payment. Your minimal re-established credit will simply impact the interest rate a mortgage lender will charge you; the rate will be a bit higher than if you had a couple of years of credit activity and at least two “trade lines” on your credit report. Six months of credit activity is a good start, but the real distinctions are the one year and two year marks.

      I don’t know if you saw my article about re-establishing credit after bankruptcy (click here if not). But based on what you’re saying, it sounds like you are already on the right track.

      Please let me know what other questions you have. I would be happy to set up a time to chat over the phone.


    February 24, 2016 REPLY

    Hi Ingrid,

    my wife and I are planning to buy a house in about a year and a half from now.
    i am filing for a CP very soon (i owe about 26K in total with a 5K being co-signed with soneone else). i am proposing to pay 7K a month after the start of the CP.
    My question is the following, after i get discharged can we get a mortgage then knowing that my wife just started a job (she has an excellent credit). i do have a steady job and by that time she’ll be working for about a year and a half.
    can we get approved?


      March 4, 2016 REPLY

      Hi, thanks for your question! The big thing for you will be to build up your down payment as much as you possibly can. If you have steady jobs, good credit on your wife’s part, and a good down payment, you should not have any trouble. What “good down payment” means, however, depends on the lender, the location you’re buying in, and the type of property. For example, if you’re buying a townhouse, semi, or detached home in Toronto, you could potentially buy with 15-20% down. However, buying a condo in Toronto might mean that the lender wants 20-25% down, because they take longer to sell and the lender factors that into the decision. And if you’re looking at a smaller urban area or something a bit more rural, you may need 35% down or even more. So it’s important to talk to someone experienced to really look at the specifics so that you know exactly what your game plan is and what to expect. And don’t forget to start re-establishing credit as soon as you can after the discharge!
      Best of luck –

    March 17, 2016 REPLY

    Thanks a bunch…
    you’re truly amazing..
    keep it up.

    April 3, 2016 REPLY

    Hi Ingrid,

    Its been 2.5 yrs since my discharge. I have 1 MC credit with CapitalOne that started at $300 secure card since 2yrs and it is at $1800 unsecured now. I have a joint car loan which is almost paid off. My credit score was as low as in the 400’s and it is at 660 now. Do I still need one more credit card and wait another two years building stronger credit score, say with a secure visa? If so which company should I use for it? After getting advise from a friend, I tried applying for a RRSP loan which was supposed to help build my credit and allow me to take the money out for down payment after 90 days, but I was denied that loan by my bank(PC). How can I get one of the secondary lender to get me a approve for a mortgage? I have a decent job and been there four years making $60k/year just for myself. My debt to expense ratio is low and have 5% down payment. What can I do to get mortgage approved?

    April 15, 2016 REPLY

    Hi, I had filed a consumer proposal in Nov 2013 and for term ending Oct 2018. I am better financially now and am ready to pay off the CP. I also have an unsecured credit card that I got around 5-6 months back and spend 50% of the limit and pay it off in time in full. I want to buy a car and a house I need some guidance please.

      May 10, 2016 REPLY

      Hi Sanjay, thanks for your question. To improve your credit, you’ll want to add another credit facility for sure, and I’d keep your spending on the card to less than 30% if possible, not 50%. I would avoid adding a big debt like a car loan until you’ve done a bit of mortgage planning, because a car loan or lease can really impact how much you qualify for on the mortgage side of things. I have a post with some detailed suggestions about mortgage after consumer proposal on the site also. I’d be happy to chat with you about your options if you want to get into more detail. Feel free to get in touch with me.

    April 21, 2016 REPLY

    Hi There,

    I was just married a few months ago. My husband claimed bankruptcy and was discharged in 2011. I purchased a home in 2012 (that my father co-signed as I only made $1000/mth) that is up for refinancing in 2017. My father passed away and I have no other family. I am making $1500/mth now and have very good credit but will likely still need a co-signer. Will my husband be able to be on the mortgage without needed another co-signer? He makes over $100,000/year and the mortgage is for $125,000 (house is appraised at $410,000)

      May 10, 2016 REPLY

      Hi Samantha, thanks for your comment! Because the mortgage is less than 25% of your home’s value, you are most likely ok to do the mortgage on your own at this point. In case you do need your husband to co-sign, the most important thing is for your husband to get aggressive about fixing his credit. See my articles about credit after bankruptcy. If you need more input, please don’t hesitate to get in touch with me directly so we can get into the specifics. I’m happy to help.

    January 29, 2017 REPLY

    Hi, I was speaking with a personal banker at a major Canadian bank and he basically told me a consumer proposal is worse for my credit score than bankruptcy. He also intimated that it takes way longer to rebuild credit after a consumer proposal. When I entered into it I was told that it was the opposite. I realize both have challenges to overcome once discharged, but after speaking with the bank I’m questioning why I’m paying back a debt in years rather than declaring bankruptcy for the first time and likely being done in 18 mo. I’d like to buy a house when this is over and I’m working on saving a sizeable down payment….is this easier after a consumer proposal or a bankruptcy????

      January 31, 2017 REPLY

      Hi Catherine, thanks for your question. Unfortunately there is a lot of confusion and incorrect information out there about how consumer proposals and bankruptcies are looked at by lenders. Bankers don’t deal with it that often, so they can sometimes perpetuate the myths.
      Here’s the scoop…
      Reference to a consumer proposal or bankruptcy shows up in the “Public Records” section of your credit report. A consumer proposal disappears off your credit 3 years after it’s paid out, while a bankruptcy shows on your credit bureau for 6 years (in the case of Equifax) and 7 years (with TransUnion) after the bankruptcy is discharged. So, ideally you should aim to get the consumer proposal paid off as soon as you possibly can.
      Separate from this, the negative “credit events” that show in your credit report, specific to each piece of credit, will show for approximately 6 years, regardless of whether they were written off for a bankruptcy or negotiated down through a consumer propsal. This would typically be an R9 rating for a credit card or an I9 rating for an installment loan. This report from the Financial Consumer Agency of Canada explains this in more detail – see page 10. Because of this, even if the reference to the consumer proposal is gone from the public records area, the R9 or I9 will likely still show up in the body of the credit report for the full 6 years or so.
      That said, lenders do consider a consumer proposal is considered a bit less severe than a bankruptcy, so it can be *slightly* easier to get a mortgage.
      The most important things you should focus on:
      1. Get the consumer proposal paid off as soon as possible
      2. Re-establish *new* credit following the consumer proposal (see my post at to get more details on this).
      3. Build up your down payment as much as you possibly can (again, see for suggestions on the amount you should be shooting for)
      I hope that helps. Please feel free to get in touch with me to discuss your specific situation in more detail.
      All the best –

    February 7, 2017 REPLY

    Hi, Ingrid, My husband and I have been out of bankruptcy for two years now. There was a home,credit cards and a unsecured loan involved. We have not established credit yet do to my husband was on wcb and I am on a permanent disability pension. We do have in cash 20% for a down payment. We live in bc but are going to purchase a home in PEI. Our time line is 2 to 3 months from now. Would a b lender consider this . Is this realistic. The mortgage would be around $65,000. Thank you Carolyn

      February 10, 2017 REPLY

      Hi Carolyn, thanks for your question. Because I work primarily in Ontario, unfortunately, I can’t give you guidance on B lender options in PEI. If you would like, I can connect you with a colleague out east who would be able to help you. In the meantime, I would strongly urge you to re-establish your credit – see my post about Fixing your Credit after Bankruptcy . It’s really critical and will help you long term.

      All the best,

        February 10, 2017 REPLY

        Hi,Ingrid, Yes I would appreciate if you could put me in contact with your colleague.Thank you Carolyn

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