Bankruptcy

This is the main blog page for articles about bankruptcy in the construction industry. Since the construction industry relies heavily on credit, bankruptcy is an unfortunate reality on many projects around the country.

In fact, bankruptcy is more common in the construction industry than any other industry, meaning you will most likely work with a bankrupt party at one time or another on a construction project. There are various causes for bankruptcy, and bankruptcy could occur at any rung of the payment chain. GCs and owners may go bankrupt during times of growth because taking on new jobs means spending more cash. Similarly, outside influences like natural disasters and market downturns could cause a massive loss of cash, ultimately leading to bankruptcy. Another common cause of bankruptcy stems from long payment times in the construction industry. For example, a company may need to front a large amount of cash in order to get the project moving and pay the lower-tiered parties. If payment is slow enough, the outflow of cash could be greater than the income, causing a financial nightmare. These events that occur at the top of the payment chain almost always trickle down and affect everyone else on the project.

If you need help with bankruptcy in the construction industry, you can browse the articles about bankruptcy below to learn what you can do in case it happens. If your concern isn’t addressed on our blog yet, you can ask your question on the Expert Center to get custom advice from a construction attorney.

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