A NEWCASTLE builder accused of leaving five Hunter families out of pocket and with unfinished or 'defect-riddled' homes has been declared bankrupt.
Ben Geary, of BJG Builders, filed for bankruptcy just days after Charlestown MP Jodie Harrison launched a scathing attack on him using parliamentary privilege in November.
Ms Harrison said Mr Geary, of Lake Macquarie, had left a string of defective work, failed to comply with rectification orders and placed "enormous pressure" and "financial strain" on his clients.
She urged the government to "create the necessary protections" so homeowners can undertake the "big financial commitment" of building or renovating their homes "in good faith".
"With so much at stake, it is important that regulations exist to protect consumers when things go wrong," Ms Harrison said.
According to bankruptcy trustee Mitch Griffiths, of Rapsey Griffiths Insolvency and Advisory, said there were two secured creditors owed $201,634 and 10 unsecured creditors owed $341,565.
Mr Griffiths told the Newcastle Herald this week he expects the debt to increase.
The estimated debt at December only included one of the homeowners, listed as owed $180,000. The others have no official court judgement against Mr Geary for money owed.
Mr Geary owns a half-share in a house at Lake Macquarie, estimated to be worth about $560,000, that will be used to repay some creditors but there will be a significant shortfall in what is owed.
"We are in the process of completing our initial investigations into the bankrupt's affairs and will shortly seek to realise his interest in real property," Mr Griffiths said.
"Known unsecured amounts total $341,565 owing to ten creditors, however, this is expected to increase following the receipt of further information from creditors."
As Mr Geary had been declared bankrupt it triggers access for some of the homeowners to make claims under home building compensation (HBC) cover, formerly known as home warranty insurance.
Claims under the NSW government insurance scheme, designed as a final safety net for homeowners to guard against incomplete or defective building work, are capped at $340,000.
One of the homeowners told the Newcastle Herald this week that the system was "completely broken".
She is still going through the process of having her incomplete house assessed and is unsure exactly how much the final bill will be to complete the house.
"The whole process is wrong, the builder has so much time on their side while the consumer just bleeds money," she said.
"So many people just give up, they walk away because they can't afford to keep fighting.
"In many cases the insurance claim doesn't cover the losses."
The family joined Ms Harrison in calling for increased protection for homeowners.
"There needs to be an inquiry that sparks real change in the system," the woman said.
"Every time you turn a corner there is another issue to overcome and all we wanted to do was build a house to live in."
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