EUROCERTIF
The bankruptcy of a contractor mid-project is one of the worst scenarios for a client: the works stop, the money paid risks being lost and the building remains unfinished. The situation is difficult, but not hopeless. Keeping your cool and knowing the right steps helps limit the damage. Here is how to react, step by step.
Confirm the bankruptcy and stop payments
At the first signs (stalled site, absent workers, unpaid suppliers), check the company’s official situation. The publication of a bankruptcy judgment is publicly available. If the bankruptcy is confirmed, immediately stop all payments: paying after the judgment would only worsen your loss, without guaranteeing the progress of the works.
Identify the trustee
When a company is declared bankrupt, the court appoints a trustee to manage the liquidation. They are now your point of contact. Their name appears in the judgment. Contact them promptly to report your situation: recovery of amounts and the possible release of the site go through them.
Document the state of the site
Without delay, build a solid file: dated photos of the progress, a copy of the contract and quotes, proof of all payments made, written exchanges with the contractor. Having the state of the works recorded by a bailiff or an expert can prove valuable: it objectively establishes what has been done and what has been paid in advance.
Declare your claim
If you have paid amounts for works not carried out, you are a creditor of the bankrupt company. You must declare your claim to the trustee within the legal deadlines. Let us be clear: individuals are rarely a priority in the distribution, and recovery is often partial. But this declaration is essential if you hope to receive anything.
Call on guarantees and insurance
- Check whether an insurance (legal protection, completion guarantee) can cover all or part of the loss.
- For defects relating to the solidity of the building, the contractor’s ten-year insurance may still be available.
- Find out about any bank guarantees or sureties provided for in the contract.
Resume the works
To finish the works, you will usually need to bring in a new company. Before it takes over, the documented inventory is essential: it prevents disputes over “who did what” and allows the new company to price precisely what remains to be done. Choose this new provider with all the more care given how painful the experience has been.
Prevention is better: check before signing
The best protection remains prevention. Before entrusting a project, check the company’s financial health, stage payments against actual progress rather than paying in advance, and favour companies whose reliability has been assessed. This is precisely the role of a label like EuroCertif: to flag, upfront, financially solid companies. Before signing, remember to verify the label of your contractor — a few seconds that can save you a lot of trouble.