First Deal, Big Contractor Issues

[Chase Fender]

I recently purchased my first deal back in October. I made plenty of mistakes, but I will save those for another post. The biggest issue I have run into is with my general contractor. I found this contractor from the wholesaler through whom I bought the house. He marketed himself as an investor-focused contractor and I liked him from the beginning.

He had recently purchased the company and it appeared that this was his first time running operations (should have asked more questions here). After discussing pricing and scope of work, he explained that I would pay for each phase of work as it was about to begin (this should have been a huge red flag).

It is now February and the house is still not complete. I noticed the expected finish date kept pushing and dove more into what was going on. As the story goes, his business partner had been embezzling money from him. At the same time, his daughter was admitted into the ICU. He has now informed me that the company has been shut down and he may soon be declaring bankruptcy. I am estimating that there is still about $5500 worth of work to complete the project plus the dishwasher, refrigerator and some bathroom items (that I have already paid for).

The gentleman and I still have a relationship and he is paying for a guy to come work when he can afford it (telling me he is building mobile homes for $12/hr during the day and managing the night shift at McDonald's to cover bills and my work). Although the gentleman got himself into this situation, I am at fault here for letting it happen. I threatened that I would take him to court over this but I do not want to screw over his family, plus I know he doesn't have anything anyways. He mentioned that he was four months behind on his rent and I told him I was willing to let him and his family move into the house so he could work on it as he lived there, hoping to would get done quicker. He declined, saying his mother in law had helped them out with some rent money. But he mentioned that the gentleman he had been paying to work on the house would be willing to do this. The issue is, I do not know this guys as well. There isn't too much work left to do, so they would move in and out quickly or would be expected to pay market rent once the project is finished, which I do not think he and his family could do.

My concern would be that if I let them move in to finish it, then I could not get them out after and would have a lot of legal issues. I understand that this gentleman had personal reasons for not wanting any form of law to get involved, but that still does not convince me I could get him out of the house when I want him to.

Has anyone ever dealt with an issue like this?