There is no doubt that filing a consumer proposal damages your credit rating.  Anything short of paying your creditors in full with interest in the normal course of business will result in a bad mark on your credit bureau report.  Filing a consumer proposal results in a R7 credit rating which remains on your credit bureau report for 3 years after your consumer proposal is paid in full.  In plain speech a R7 credit rating means that you have compromised or settled your debts, which is exactly what a consumer proposal does.  Filing a consumer proposal stops interest, prevents creditors from taking any further legal and/or collection action and allows you to compromise/settle your debts.  Consumer proposals can have as few as one payment, but many consumer proposals can run for the maximum time period of 5 years or 60 months.  Therefore the R7 credit rating which results from filing a consumer proposal could be on your credit report for as few as 3 years up to a maximum of 8 years.

More information on consumer proposals

-Chris Welker