Embed construction in the Bankruptcy Agreement

Aug 6th, 2022
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How to embed construction in the Bankruptcy Agreement

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BE DEVASTATING. JASON: IF YOUR CONTRACTOR CALLS IT QUITS IN BANKRUPTCY COURT, YOU MAY HAVE LITTLE RECOURSE, BUT THERE ARE SOME THINGS YOU CAN DO TO TRY TO PREVENT A NIGHTMARE. THE I-TEAM INVESTIGATES TWO CASES WHERE HOMEOWNERS SAY THEY HAVE LOST THOUSANDS OF DOLLARS. TOOK OUR RETIREMENT FUND, MOST OF IT. JASON: CITY AND HER HUSBAND SIGNED A CONTRACT WHICH ARE STILL CONSTRUCTION AT THE END OF JULY AND SHORTLY AFTER PAID ALMOST $17,000 FOR OUTSIDE HOME AND GARAGE RENOVATIONS IN JOLIET. TODAY WERE GOING TO DO THE WHOLE OUTSIDE OF YOUR HOME. JASON: THE FOXES WERE THRILLED WITH THE COMPLETED ROOF JOB AND REMOVAL OF A CHIMNEY, BUT -- SO IS EVERYTHING THAT WAS SUPPOSED TO BE DONE. THEY WERE GOING TO DECIDING, GUTTERS. JASON: THEY ARE STILL WAITING ON GUTTERS, THE SIDING REMOVAL, AND REPLACEMENT. THEY SAY AFTER THE ROOF WAS COMPLETE, THEY KEPT GETTING EXCUSES AND DELAYS FROM AN OFFICE MANAGER. I PROMISE, I PROMISE WE ARE GOING TO GET TO YOUR HOUSE. YOURE GOING TO BE ON THE SCHE

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For example, you cant discharge debts related to recent taxes, alimony, child support, and court orders. You may also not be allowed to keep certain assets, credit cards, or bank accounts, nor can you borrow money without court approval.
The Supreme Court found, that for purposes of determining the dischargeability of a claim for fraud, money promised in a settlement agreement retains the character of the underlying debt and is therefore non-dischargeable. Archer v. Warner, 538 U.S. 314, 123 S. Ct.
Bankruptcy allows people to be released from their contracts if they can no longer afford to perform their obligations. People need to decide whether they want to keep, or assume, their contracts or reject them within 60 days of filing Chapter 7 bankruptcy or before filing a repayment plan in Chapter 13 bankruptcy.
Types of debt that cannot be discharged in bankruptcy include alimony, child support, and certain unpaid taxes. Other types of debt that cannot be alleviated in bankruptcy include debts for willful and malicious injury to another person or property.
Debts not discharged include debts for alimony and child support, certain taxes, debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit, debts for willful and malicious injury by the debtor to another entity or to the property of another entity, debts for death or personal
When the debtor is the general contractor on an uncompleted construction project, the bankruptcy court will send a Notice of Commencement of Case to all creditors listed in the debtors bankruptcy petition, which will usually include the general contractors unpaid subcontractors and suppliers.
The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units
When parties settle before a bankruptcy filing, the primary risk with respect to settlement agreements is that the party required to make one or more payments under the agreement in exchange for a release will obtain a discharge of its payment obligation.

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