Legal Question in Bankruptcy in California

Re: contractors filing bankruptcy

There are a lot of factors that need to be reviewed before an answer can be given that means anything to your particular situation. Questions such as what chapter did he file, did he file personally, or did his company file, what stage of construction are you in, etc... As a general rule, however, the bankruptcy court cannot assert rights to receive money owed that are any greater than those the contractor already had. In other words, if he just received a progress payment, and has performed no additional work since, he is not entitled to receive any money, therefore the bankruptcy court would generally have no claim greater than his to receive or lien money. If he was owed money at the time he filed, then it could be a different story. You need to consult with a bankruptcy attorney to determine what you can and cannot do. Feel free to call or email me directly to discuss this further if you wish to retain counsel.

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