What to do if your contractor files for bankruptcy

CHICAGO (WLS) -- If your contractor files for bankruptcy before completing the job, it could be devastating. You may have little recourse but there are some things you can do to try to prevent the nightmare.

The ABC 7 I-Team talked to homeowners who said they lost thousands of dollars.

"He took our retirement fund. Most of it, half, three quarters of it. We thought it would be our way to get out of the house," said Cindy Fox through tears.

Cindy and her husband Terry signed a contract with Tristan Construction at the end of July and shortly after paid almost $17,000 for outside home and garage renovations in Joliet.

"So they were going to do the whole outside of your home?" asked ABC I-Team Consumer Reporter Jason Knowles.

"Right," replied Terry Fox, "The roof the siding the facet the garage."

The Foxes were thrilled with the completed roof job and removal of a chimney, but they are still waiting on those gutters, as well as the siding removal and replacement. The Foxes said after that roof was complete, they kept getting excuses and delays from an office manager.

"'I promise I promise were going to get to your house,'" Terry Fox said they were told. "'You're going to be on the schedule.' That's what I heard every week.'

But in September Tristan Construction filed for Chapter 7 bankruptcy.

"We wanted to sell the house next year," said Fox. "It's too big for me to take care of anymore. Like I said, it's too hard for us on the stairs and now we have a blue roof and a tan house. I just feel so cheated. I'm so disappointed in people who think they can do this to people and get away with it."

In Manhattan, Illinois, Bruce Etzcorn and his wife Toni said they lost a $3,750 deposit to Tristan for a $7,000 custom composite pool deck job.

"We heard nothing," said Bruce Etzcorn. "There was no proactive communication. There was no anything so we contacted our sales guy who referred me to the office manager. It was clear at that point that things felt wrong, we were emailing and texting but we kept getting the run around."

The estimated July 4 completion date came and went. Etzcorn said Tristan Construction cancelled the job in mid-July.

"He had then said 'I will think about giving you back your money,' and then I heard nothing, and then the next thing I got was a bankruptcy letter," Etzcorn said.

Eztcorn showed the I-Team emails where Tristan Construction blamed wet weather for the delays and refused the refund. They also wrote. "We have a lot of customers who signed contracts with us in June..."

Tristan Construction is located in a modular home in Manteno. The I-Team never heard back from owner Michael J. Gallagher or his bankruptcy attorney.

But in an email, Gallagher's son said his dad is "very ill," that he "completed over 30 jobs" and now has "heart failure.." The email went on to say that "his lawyers advised him that because of his health, he should consider filing Chapter 7 bankruptcy.."

The Better Business Bureau has four complaints on file for the company.

And if your contractor files for bankruptcy you may not have many options.

"Basically, you're out of luck. You're in the hands of the court, so basically the secured creditors are always first in line and consumers are the last in line and sometimes they get 10 cents on a dollar," said Steve Bernas, President and CEO of the Better Business Bureau of Chicago and Northern Illinois.

Cindy Fox wishes she didn't hire Tristen Construction.

"I did trust them with all my heart. I trusted everything they said to us. I took it verbatim," she said.

To try to prevent this from happening to you, have a contract with specific start times and end dates, along with a written, efficient timeline. You should always pay for jobs in thirds and use a credit card so you can dispute alleged fraud or charges for unfinished work. Once a contractor has a large sum of your cash, there are no guarantees.