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When Your Builder Goes Bankrupt Before Job is Complete

By: Sarah Clark (ILEX) - Updated: 24 Aug 2019 | comments*Discuss
Bankrupt Builder Building Company

It's the stuff of your nightmares. You've decided to have some building work done, perhaps that new conservatory or extension you've been wanting for ages. You find your builder, agree on the price and the work starts. Until one day when nobody turns up. They won't answer the phones. Then you realise they have 'gone bankrupt'. What can you do?

Insurance Backed Guarantees

Firstly, if your construction firm or builder is a member of a professional trade association, you may be able to breathe a sigh of relief. Most associations supply lists of registered builders who can offer an insurance backed guarantee of the quality of the work, and some schemes, such as the guarantee provided by the Guild of Master Craftsmen also have an optional insurance that covers the builder should they go out of business before they complete your project. This gives you peace of mind knowing that the cost of getting a builder in to complete the job is covered and you won't be out of pocket. Always check if the construction firm or builder has an insurance backed guarantee before employing them - it can be more expensive but could save money in the long run.

Was the Builder a Sole Trader?

Your options when faced with a bankrupt (or insolvent) builder will depend on their legal status. If you are employing a sole trader to do the work and he files for personal bankruptcy, all you can do is apply to the official receiver handling the bankruptcy petition to be added to the list of creditors. Details will be published in the local press if any individual files for bankruptcy...and contact details will also be published. As insolvency is considered public information, you can call the county court where the order was/is to be made, or the official receiver, and they will be able to tell you if a petition has been filed and a bankruptcy order made.

You can only claim for any deposit you've paid minus any work/materials paid from that deposit. The official receiver will be able to give you advice on how to be added to the creditor's list. This means that the debt owed to you will be taken into consideration when the official receiver administers the builder's financial affairs but doesn't guarantee that you will see any payment. Unfortunately, all you can do is ask another builder to quote to complete the work and start over.

Was the Builder a Limited Company?

Even if the company is just one person, it can still be a limited company rather than a sole trader. Check the company status online for free at Companies House. If they are limited, there is a possibility that they may not be bankrupt, but they may have gone into administration, which is when a company calls in accountants or 'administrators' to attempt to salvage the business. If this has happened, there's no reason why your job shouldn't be completed - the aim of administration is to keep the company going if possible. Keep in touch with them and make a note of the administrator's contact details. It's possible that the company is in such bad financial shape that they will become insolvent, in which case you will have to apply to be added to the list of creditors as for a sole trader.

Again, all you can do is get in another builder and start again.

Did You Pay the Deposit by Credit Card?

If you paid a deposit of between £100 and £30,000 on a credit card (not a debit card) you could try calling on the Section 75 of the Consumer Credit Act which gives the credit provider equal liability in law for a breach of contract. If the builder goes out of business - you can claim the deposit and any out of pocket expenses back from the finance company.

You may also be covered if you have a linked finance agreement - credit supplied for a conservatory that was arranged by the building company for example. You wouldn't be covered if you took out a separate loan from your bank though, it has to be specifically linked to the contract for the building work, not a separate credit agreement.

You need to contact the finance company directly and say you are claiming under section 75 of the Consumer Credit Act 1974. If the finance company tries to tell you that they will put a claim in to the administrators, point out that you know your rights, and you are entitled to compensation for the deposit and any out of pocket expenses from them, without waiting for any insolvency administrator's decision.

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[Add a Comment]
Austin Scott Baines is a fly by night that prays on those he can gain trust of and delivers nothing but pitiful excuses and lies. Amenable until you pay him an advance and then vanishes from the face of the planet. Do not trust this "man" with your money.
Conned - 18-Aug-19 @ 3:30 AM
Austin Scott Baines did the job but charged £300 for the building certificate and kept liying about sending it he never did have taken him to court for the return of monies he has now gone underground left his home address BEWARE YOU HAVE. EEN WARNEC
big g - 31-Jul-19 @ 5:00 PM
We have recently paid a deposit to a building company for a new conservatory - The Company name we paid into is different to the original comnpany who have now gone into radministration - we are concerning about proceeding with this company as we don't know how interconnected they are - It now seems strange that they used a different company name to the one we had originally contacted. We are also concerned that we have paid a depost for this work. Any Advice please CH
CH - 30-May-19 @ 9:43 AM
Beware of Alistair Clarke of Inex Designs operating in the Luton Area. He has previously been Director of several dissolved companies. He was commissioned in October 2018 to knock through my house and install a new kitchen. He has walked out on the job having taken my furniture and appliances and left my house unsafe with live wiring exposed and a half demolished stair case with the work done so far all bodged. He is not taking my calls or messages and still has my house key. He had provided 5 separate deadlines for completion and failed to meet any of them. A
Bruce - 1-Feb-19 @ 6:22 AM
Beware of Nikki London of London Roofing 21 Angelica Close, Yiewsley. UB7 8RD. He was meant to replace a flat roof for me, the scaffolding was taken down before we could inspect the work, he reassured us, the work had been completed to a high standard and gave a 5 year guarantee. However when it next rained heavy, we noticed the roof was still leaking, we then had another roofer out to inspect Nikki’s work. It turned out no work was ever done. We had pay out another £7,000 for a new roof replacement. Nikki London is a prolific liar and cheat. Please avoid this scammer.
Bob - 27-Jan-19 @ 7:06 AM
Mark Chambers of precision bathrooms / DMC Builders and whatever other company name he thinks of - STOLE £30k from me. Instructed to build a one storey extension. He has left me and my daughter living with no kitchen , holes in the wall , poor workmanship so bad it’s got to be redone ., roof hanging off and leaking .I don’t have any money to get it fixed. Declared himself bankrupt in December. CRIMINAL
MsMurphy - 26-Jan-19 @ 2:53 PM
Dear MG - we have had a very similar situation with Mark Lilley - and he owes us a similar amount. FYI - he has now filed for insolvency:Brighton & Croydon Office ( Tel 020286815166). I would be delighted to have a private chat...
PP - 26-Apr-18 @ 2:57 PM
Do not use Lanai Outdoor Living in Cambridge. Peter Luke Morris has ripped people off for thousands of pounds. He takes huge deposits on expensive garden rooms then does not deliver. He refuses to answer emails and return calls. He was in prison in Egypt for property scamming. Avoid!!!
Blockhead - 21-Mar-18 @ 2:46 PM
Do not use Mark Lilley of Dorking Surrey. Although highly recommended he requested an upfrontand then 3 additional payments.After 4 months he told us he was bankrupt.He left site owing an estimated £60000 and left us with a 4M by 3M hole in our house. He is apparently looking for new work.At this time he has not filed for insolvency and as far as we can see continues to invest in expensive hobbies for his family.
MG - 14-Mar-18 @ 10:54 PM
Do not use Mark Lilley of Dorking Surrey.Although highly tecommended he requested upfront and acditional payments.He then told us he was bankrupt owing an estimated £60000 and left us with a 4M by 3M hole in our house.He is apparently looking for more work.
MG - 14-Mar-18 @ 10:47 PM
Beware Austin Scott Baines.Trades under various limited companies names.Will take your money and then disappear!
Nigel - 1-Dec-17 @ 9:58 AM
Beware of Michie of Dundee,trade under various names,more recently Ultrabuild,Ultra group. Seems to be a family trait to set up business,take money and then be liquidated, and repeat. Father having done this several times now has handed the family expertise on to Calum Michie and Hayleigh Jane Michie.Any work they do undertake is substandard and uninsured. Cowboy builders doesn't come close to describing this despicable family. Avoid at all costs.
Dan - 14-Apr-17 @ 9:47 PM
Beware of Tim Green from stallinsbrough Lincolnshire We trusted him as he is a brother of a work colleague. We wanted and an extension and loft conversion. He requested all his money for building and materials in advance. He had been working in he house for one year. Te expensive kitchen and bathroom materials that we bought, he fitted them in a rubbish way. Even the cold and hot water in bathroom signs are opposite ways. the rest of the house is in a mess. The first floor rooms that he had done are not even complete with low standard finishing. He installed very cheap materials. The wires of electricity are coming down from the ceiling everywhere, even in of the bathrooms. We had to move to the house this week and live with the consequences. we are in a lot of stress because of this inexperienced builder who claimed that he knows his job. He never promised anything and was done. He is even asking for extra money. Please advice what to do. We feel that we have been fraud.
semsem - 24-Mar-16 @ 9:49 PM
My house has been left upside down by cowboy builder days before christmas my autistic son has started self harming has a result- got me to pay for skip and brought his own rubbish to fill it up with leaves job at 1pm-please please please response to my message there is so much to say and i can't put it all down on here he has hire equipment charged to my card and being used elsewhere.
wasteoftime - 20-Dec-15 @ 11:22 PM
Beware against Darren Hill, Thomas Street, Loughborough, Darren Hill Lofts and D Hill Construction this builder seemed plausible, we got a written quote, agreed a written payment schedule, he pulled apart a perfectly good house which was architect designed and built in 1998. Just to do a loft conversion and an extension. When we came back from holiday we learned he had not been to site. He hadn't paid the traders, he had stolen money from an envelope addressed to my window installers. (£15,000) Our house is still not watertight and we were supposed to be moved in in two weeks. He has been paid 90% of the quote and in two weeks we will be homeless with two children.
Immi - 9-Aug-15 @ 1:14 PM
The builder (recommended by the Architect) has not completed the work.He collected his tools and left an unfinished extension having been paid a significant sum. I have found out that his limited company was dissolved on 17.03.15. What has happened to the Consumer White Paper written by the Department for Business, Innovation and Skills (July 2009)?It was titled A Better Deal for Consumers. The Government has done nothing to protect consumers from rogue dishonest builders who appear to be able to dissolve their companies, leave their clients out of pocket with unfinished works and then set up a new company and start again. BE WARNED AGAINST BUILDER BARTOSZ MENDRALA (Bartek). His company was Best Place4U of 15 Queen Street Croydon CR0 1SY
Lottie - 9-Apr-15 @ 10:44 AM
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