Bankruptcy

If you live in the (519) area code call 310 John and we can help you sort through your debt issues.

Construction Contractors
The Construction Lien Act provides that all monies received by a contractor or a sub contractor from payment of a contract in relation to work done to a property, are deem to be held in trust for the benefit of the sub-contractors and material suppliers, of the contractor or of the sub contractor. Accordingly, only the profit component of the contract price is available to satisfy the operating costs of the contractor or subcontractor. While this is what is intended to happen, the fact is that such detailed accounting and segregation of funds rarely ever happens in construction businesses. Accordingly, an unpaid material supplier or sub contractor may take steps to try and have their debt survive bankruptcy, on the basis that the contractor, or sub contractor, as the case maybe, breached the provisions of the Construction Lien Act and therefore, the Bankrupt committed a fraud and then under section 178 of the act, there debt would survive.

If such a situation exists, and the amount is significant, person may want to consider a proposal to attempt to reach an agreement with such creditors, and then avoid these problems.