Accepted Answer

If the builder goes bankrupt and does not have your deposit in escrow, you can indeed lose the deposit. You also need to look at your contract to see if the contingency does not materialize as to whether or not you are entitled to your deposit return or if the builder gets to keep it as liquidated damages of if it was a non-refundable deposit (purchase money guarantee). If the deposit was supposed to be refundable and the builder did not keep it in escrow and goes bankrupt, you are going to have to file as a creditor of the bankruptcy estate. You will not be able to cancel the contingent contract until the contingency expires.

---

I hope you found my answer helpful, please click on the GREEN ACCEPT for my answer. This is necessary for me to be paid for my work and so that I can get credit for assisting you. Your question will not close, and you will still have the opportunity to follow-up if needed. Leaving a bonus and positive feedback is not required, but doing so is certainly appreciated!

If you have additional questions, please keep in mind that I do not know what you already know or don't know, or with what you need help, unless you tell me. Please consider that I am answering the question or question that is posed in your posting based upon my reading of your post and sometimes misunderstandings can occur. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered.

Also remember, sometimes the law does not support what we want it to support, but that is not the fault of the person answering the question, so please be courteous.

There can also be a delay of an hour or more in between my answers because I may be helping other customers or taking a break.

Expert:	PaulmoJD
Pos. Feedback:	99.4 %
Accepts:
Answered:	12/31/2008

Lawyer

Attorney licensed in RI, MA, LA also experienced practicing by permission in numerous other states