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does a general contractor's bankruptcy effect subcontractor's lien deadlines?

VirginiaBankruptcyMechanics Lien

Apologies -- I wanted to ask this of the attorneys. I mistakenly posted on the "payment expert" site. I hope this makes it to the correct inbox. Please delete my other question if it comes up on your site. Again, apologies. We are victims of the David James Homes fraud in Virginia. All our payments were to DJH we had no dealings with the subcontractors, did not hire them or sign contracts with them and have no idea who most of them are. We were never owing to DJH at any time in our contract with DJH and are, in fact, owed $42,000 by DJH for work we paid for not supplied. A subcontractor has put a lien against our property in the amount of $3,800. It is now past the 6 months deadline they have to enforce it. Additionally, it is for work we already paid DJH for (DJH had a very weird PREpay draw schedule, so we gave the money for counters to DJH 3 months before they were installed, DJH just never gave the money to the subs). Merle Heckman filed bankruptcy last fall with DJH. The case is ongoing. Because the 6 months has passed, can I petition my local county court to remove the lien or do I need to wait until some specified time after the DJH bankruptcy case closes? The “automatic stay” wording regarding bankruptcy was confusing and I don’t want to petition to have a lien removed before the window for enforcement has closed

1 reply

Mar 3, 2020
If the 6 months passed prior to the filing of the bankruptcy, then the lien is essentially dead letter and cannot be enforced further.  However, if the bankruptcy was filed first, then the time for enforcing the lien is tolled by the bankruptcy.  What this means is that the subcontractor will have whatever portion of the 6 months remained at the time of the bankruptcy to enforce the lien once the bankruptcy is complete. Of course any enforcement action in Virginia Circuit Court would be subject to your defense of payment depending on the details of payment etc.
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