General Contractor is declaring bankruptcy and owes me work/$$$.

7 Replies

I hired a General Contractor/Small Co. (in business for 40 years), to add an addition to my Airbnb rental house. I paid half down in March 2018 and he was suppose to start on July 9, 2018, that is when I was closing the Airbnb so we could add the addition. I periodically called and was assured the work would begin on time.  Then, the General Contractor, broke his ribs, his business partner died, his sister who worked in the office, husband died, these are all true, and I can go on and on with other issues. I was so frustrated and angry but wanted to be understanding.... Needless to say no work began till Oct 2018 and I lost about 2K a month(Airbnb income) in that "no work" period of time waiting for them to get started. Finally the foundation, framing, and roof got done at a snail's pace. On March 7, 2019 he asked for 10K more even though the original contract said half down and the balance/ other half owed upon completion. He signed another contract saying that the 10 K would cover the electrical, plumbing, siding, and deck. I took in to account, the bad year he just had and gave him the 10K. ( I was not thinking straight as my mother just died a few days before.....That's my excuse for now) I guess you all know what happen next...NOTHING.  No more work was done. I recently threaten legal action and so I met with him today 7/18/19 (side note, true again, he just got out of the hospital for congestive heart failure) and he said he was not asking for more $, BUT....asked me if I could help him out and pay for the plumbing and electrical directly to his people. I told him I have already paid for the electrical plumbing and more with the 10K, and I am not his bank. Also I have no reason to believe him, given our history.  Well guess what, he then admits he has spent all the money I gave him $30K totally on not just my project, but other things/projects. Also that he gave me a low bid and has already done 30K worth of work. He now has no money and said he was trying to help me out, and has never NOT finished a job and blah, blah, blah. Then he was going to have to declare bankruptcy. 

 I am ready for a big lecture, and hired people on my own for the pass 20 years, first time hiring a general contractor. What I really need to know is.... what are my options? Am I totally screwed with this and should I just move on and take my losses? My husband thinks we will never get our money back or the work from him and it is not worth the fight.

I believe you already know the answer, but want to hear it from someone else. Cut your losses, and get that job done asap. 

Your contractor may be required to have a bond for the work.  I know that the bond requirements are local in KY, check the city requirements for where the work was to be preformed.  You may be able to be the first to hit his bond and get some money back.

I appreciate all the responses and Thank you! for the advice. I will check into the Bankruptcy lawyer and the bond, and probably, will unfortunately, have to accept that I made a costly mistake and move forward.

no reason to pay a BK lawyer he has not filed one yet..  if he is broke he is broke.. no chance of recovery most likely.

bonds are very tough to collect on..  

I know its hard .. contractors want up front money they don't have any money to front the job.. the ones that do charge more.. its a tough spot. 

Hi Lisa,

I don't have any advice to offer but my deepest condolences for his losses and yours.

That's a lot of added emotional impact on an already difficult business transaction.

Praying for wisdom and peaceful resolution for you!

Thank you for your responses, and Pam, your prayers....I need all the help I can get. But in the big picture, it is not the worst thing that has happened to me. This too will pass.... but, emotionally, I feel that I have been robbed of my funds.