When an individual makes the decision to build their dream home, it is often very exciting. With the decision to make any major purchase or investment such as this, there is also a certain level of risk. Unfortunately, there are some situations where a home buyer pays significant amounts of money to the builder only to find out that the builder was misusing the funds. In the worst of cases, the builder declares bankruptcy and the people who purchased new construction homes are left without money and without a home.
When businesses get themselves into serious debt, they may want to declare bankruptcy. While this is typically not a big deal, it can quickly turn into one if customers make significant purchases but never get the items they bought and there is no way to repay them. Clearly, there is a lot on the line any time a construction company files for bankruptcy because the people who really get hurt are the customers.
There may even be unfortunate situations where the builder intentionally took the money from one client and used it to settle old debts or pay for another jobsite. In New York State, this is a crime against the state’s Lien Law and the builder could be prosecuted accordingly. If a builder or a contractor fails to hold a clients’ funds in a special trust to be used only for their jobsite, they could be in big trouble. If more than $50,000 is used improperly, the builder can face a class-c felony. If more than $1 million is used improperly, the builder can face up to 25 years of imprisonment.
If you have questions about builder bankruptcy, contact our firm today.
If you require the services of an experienced bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq.today to schedule a consultation and discuss your options.
