How Filing A Lien Can Be Helpful on a Bankrupt Project

Let’s face facts:  2009 has not been a great year for construction.

Contractors and Suppliers large and small are facing non-payment scenarios, and sometimes, while waiting for a prolonged payment some are getting feared news:  that the owner or general contractor is filing bankruptcy.

Christopher Hill, a construction attorney in Virginia, just this week published a short and easy-to-read article on JDSupra explaining how Virginia Mechanic’s Liens Survive Bankruptcy.   Mr. Hill summarizes his point with the following:

[I]n today’s climate, contractors should not feel that they are completely helpless in the bankruptcy fight.   Filing a mechanics lien…can put a contractor or subcontractor in as good a position as possible should the owner of a project file bankruptcy.

While the article regards the mechanics lien statutes in Virginia, many other states’ lien statutes operate the same way.

Generally speaking, mechanics lien statutes are written to protect those who contributed to construction projects.   Regardless of what errors in payment occur on a construction project, mechanics liens are the best tool for your company to protect its right to get paid.

But the right doesn’t last forever, and if you file incorrectly, the rules are uncompromising.

This post originally appeared on the Construction Lien Blog, published by Express Lien.

Posted in: Mechanics Lien
Tags: ,,,,,