What Happens If Your New House Builder In Melbourne Files For Bankruptcy?

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.