If you are a subcontractor working on a property, you can lodge a mechanic’s lien against the property. First you must send a written, signed letter demanding payment with a deadline for the contractor to comply. If he/she doesn’t pay, then file a lien. A lien is just a mark on the property’s title. It doesn’t guarantee payment. However, it does place pressure on the property owner to settle your dispute to keep the title clear.

You can on the other hand, sue the contractor. If you are in Philly and your claim is under $10,000, you can sue in small claims court. The result will be a judgment in your favor. A judgment doesn’t guarantee payment, either. It’s just a document declaring that the contractor legally owes you money. However, with a judgment you can garnish money from the contractor’s bank account, if he/she has a bank account.

If you suspect that your contractor has run out of money, then the new bankruptcy laws allow you force a business into bankruptcy. It’s very complicated process, but a serious option if your contractor owes you a large sum of money.

If you are fortunate enough to be working on a government contract, the contractor was required to post a bond to qualify for the contract. A bond is like an insurance policy. File a claim for payment with the contractor’s bonding company.

My business advice to you would be to speak with an attorney about the details of your situation and map out a cost-effective, yet realistic plan to get your money.

Sharmil McKee | Business Lawyer | blog@mckeeoffice.com