Indiana and Ohio are ranked 4th and 7th respectively when it comes to the percentage of residents that file bankruptcy. Those filings often hurt more than just the company. leaving many consumers at a loss.
Joe Walker and his wife had big plans for their Glenwood Avenue home, but before they could start, she passed away. Joe wanted to finish his late wife's dream, so he hired Harrison Construction of Pleasant Lake. He paid 20-thousand dollars for a roof, a retaining wall and a new garage. After the roof was completed and the old garage was torn down, the contractor disappeared.
Joe Walker "he slowed down and eventually just basically walked off the job site."
In December the contractor pulled his equipment. Joe says he was left with a mess and almost 13-thousand dollars worth of unfinished work. Through an attorney he sent a 30-day notice to Harrison Construction, only to find out a chapter 7 bankruptcy was filed.
"He was paid to do the job and the money I paid is in limbo, it doesn't look like he'll have to pay it back at this time"
We spoke with the owner of Harrison Construction and while he declined an on camera interview, he did answer our questions. He said he feels "terrible" about the situation and will rectify it, if possible.
He also said it's hard to pinpoint exactly when the financial problems started, but he said bankruptcy became the only option when some of his customers couldn't pay the money they owed Harrison Construction
The bankruptcy is now in the hands of Mark Warsco, as a private attorney with Rothberg, Logan and Warsco, he's one of 5 trustees in the Fort Wayne region. While he couldn't talk about the Harrison bankruptcy, he did say that 90 percent of cases have no assets based on liens and exemptions, in short, unsecured creditors like Joe Walker usually only see a small fraction of their loss, if anything at all.
Warsco says the cases of bankruptcy abuse are rare and the laws are designed to prevent a filer from walking away from creditor and then reestablishing their company.
Mark Warsco "if somebody does file bankruptcy, there is no prohibition against them starting a company after they file bankruptcy. What they can't do, or should not be allowed to do, is to use the value that might still be left in the company, after the bankruptcy is complete".
In Harrison's bankruptcy filing, there are 6 secured creditors and they likely will take the bulk of the assets, those include mainly companies that have extended a loan or credit. Joe Walker is actually the 2nd largest unsecured creditor and is waiting for another hearing in October. His story is an example of the uphill battle consumers face in bankruptcy court and one more reason why it's best to avoid paying money up front if possible, because if the company goes under, the laws aren't in your favor. Because bankruptcy laws are complex, Mark Warsco advises to consult with an attorney. If you receive notice of a bankruptcy filing, you can submit a claim as a creditor to the Clerk's office on Harrison Street in the Fort Wayne district.
What are your thoughts CLICK HERE to leave us a "QUESTION OF THE DAY” comment.
© Copyright 2014, A Granite Broadcasting Station. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.