Builders of new homes were among the most damaged by the recent economic recession. Those with loans that were intended to finance the construction process found that they were unable to continue to make payments when the homes tat they built didn't sell. This led some to consider filing a personal bankruptcy, such as a Chapter 7, for both themselves personally and for their companies.
In one recent case that may sound familiar to some in New Jersey, a builder made such a Chapter 7 filing. The man filed for both himself personally and for his business. He told the court that he had built some 29 homes, some of which did not sell when the real estate crisis took hold in his home state in 2008.
According to the filing, the man was the subject of claims form banks and a homeowners association as a part of his personal Chapter 7. The business also faced many claims, totaling some $1.1 million. In each case, a trustee will be assigned to help determine what, if any, money is able to repay the creditors some of what they are owed.
The good news is that the economy appears to be recovering, though slowly in some cases in New Jersey. As it does, people are finding that they are able to repay more of their debts than they were when they were losing home values and jobs. However, for some, the economy did not take hold fast enough, leaving them with the need to seek the help of a personal bankruptcy such as a Chapter 7. In these cases, people may find financial relief due to the discharge of debts that is common in such a filing.
Source: SanLuisObispo.com, Grover Beach home builder files for Chapter 7 bankruptcy, Julia Hickey, Aug. 28, 2013