If your new house builder was to file for bankruptcy
tomorrow, there is no doubt that your project would come to a grinding halt and
that you could be left with a half-finished home. Not only is the homeowner
then forced to hire another builder to get the project finished, they will also
have lost a considerable amount of money. So, what do you do?
Firstly, you should find out whether the builder has filed
for business bankruptcy reorganisation or not. If they have, this actually
allows them to continue work during the bankruptcy process (as well as
retaining its assets and keeping agreements with subcontractors). If this is
the case, your house should eventually be finished.
If the builder has filed for business bankruptcy
liquidation, you should find out whether there is any chance of you actually
getting your money back. Depending on the status of the builder’s other debts,
your deposit might be seized to help pay these off. Even if the court has
decided to return this money, it might be months or even a few years before you
see a penny of it.
Even though filing for the latter type of bankruptcy
effectively dissolves whatever agreements the new house builder Melbourne
had with their subcontractors, you should be able to make them new offers and
ask them to continue the work. You should also file with the court as a
creditor of the builder to see whether you can get any money back for
unfinished work.
