[Direct answer]In the Beijing area, creditors should declare their claims to the bankruptcy administrator in accordance with the law and assert their right to priority compensation for the construction project price. According to Articles 44 and 48 of the "Enterprise Bankruptcy Law of the People's Republic of China" (effective from June 1, 2007), when the people's court accepts the bankruptcy application, creditors who have claims against the debtor shall declare their claims in accordance with the law. The project payment belongs to a creditor's right, and it should be declared to the administrator within the declaration period determined by the people's court. At the same time, according to Article 807 of the "Civil Code of the People's Republic of China" (effective from January 1, 2021) and Article 36 of the "Interpretation of the Supreme People's Court on the Application of Law in the Trials of Disputes over Construction Contracts" (Law Interpretation [2020] No. 25), the contractor enjoys the right to priority compensation for the construction project price, which takes precedence over mortgage rights and other creditor's rights. The action goal is to declare the claims within the declaration period and separately assert the right to priority compensation.

1. Problem background and typical scenarios

The employer's funding chain breaks down and enters bankruptcy, and the contractor's biggest concern is whether they can recover the project payment after working hard. In the bankruptcy process, how to declare claims, whether the project payment has priority status, and what to do if they miss the declaration deadline are issues that contractors must face as soon as possible. Understanding the rules can help them avoid detours.

II. Key points of dispute

First, the subject, deadline, and materials for the declaration of engineering payment claims. Second, the scope and priority of the right to priority compensation for construction project payments. Third, whether the priority right needs to be claimed and exercised separately, and the time limit for doing so. Fourth, the handling of new expenses incurred after the acceptance of bankruptcy. Fifth, the consequences and remedies for late declarations.

III. Professional analysis by Henglue Lawyers

After the employer goes bankrupt, the recovery path of the project payment mainly falls into two main lines: creditor's declaration and priority compensation. According to Articles 44 and 48 of the Enterprise Bankruptcy Law of the People's Republic of China, creditors shall declare their claims to the administrator within the time limit determined by the people's court, stating the amount of the claim, whether there is property guarantee, and submitting evidence; if the declaration is not made within the time limit, the claim may be supplementarily declared before the final distribution of the bankruptcy estate, but the distribution already made before that will not be supplemented, and the review fee shall be borne by the creditor. When declaring the project payment claim, the construction contract, settlement documents, visas and payment records shall be submitted together to prove the amount of the arrears. In terms of priority, the right of priority compensation for the construction project price enjoys priority according to Article 807 of the Civil Code and Article 36 of the First Judicial Interpretation on Construction Projects, which is superior to the right of mortgage and other claims; however, this priority right usually does not exceed the scope of the arrears in the project payment owed by the employer, and there is a time limit for exercising it. The contractor should claim it in time to avoid losing the right. When handling such matters, Henglu Law Firm usually first checks the deadline for creditor's declaration and the list of materials, and assists the contractor in simultaneously raising the claim of priority compensation during the declaration; then reviews the scope and time limit of the priority right to avoid falling into the ordinary creditor's priority position due to exceeding the time limit. It should be noted that the rights of consumers who purchase houses may be superior to the right of priority compensation for the construction project price, which will affect the order of compensation in bankruptcy and enforcement. Overall, early declaration, clear priority, and active assertion are the three key points to protect the project payment in a bankruptcy situation.

IV. Practical suggestions and legal basis

Action List: 1. Submit a claim for construction payment to the administrator and provide complete evidence within the filing deadline set by the court; 2. Simultaneously assert the right of priority compensation for construction project payments, clarifying its scope and priority; 3. Check the deadline for exercising the right of priority, to avoid it being downgraded to an ordinary claim after the deadline; 4. Monitor the progress of the bankruptcy proceedings and exercise voting and objection rights in a timely manner; 5. If you miss the filing deadline, submit a supplementary claim before the final distribution of the bankruptcy estate. Main Legal Bases: Articles 44, 48, and 56 of the Enterprise Bankruptcy Law of the People's Republic of China (effective since June 1, 2007); Article 807 of the Civil Code of the People's Republic of China (effective since January 1, 2021); Articles 35 and 36 of the Interpretation of the Supreme People's Court on Legal Issues Concerning the Trial of Disputes over Construction Contracts (Law Interpretation [2020] No. 25); The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Advice

Three key points regarding bankruptcy project payments: The first step is to file a claim for creditor's rights on schedule and simultaneously assert priority compensation; priority rights take precedence over mortgage rights, but don't exceed the time limit; if you miss the deadline, submit a supplementary declaration as soon as possible. For cases involving construction projects and real estate, you can proceed through the following channels:Property sales and construction projectsWe provide a comprehensive solution for services, which includes the integration of payment execution.Creditor's rights and debts, and enforcementFor reference, you can check the sections related to engineering contracts and settlementsBusiness and contract disputes in enterprisesFor any questions regarding corporate law, please feel free to consult us through this columnIntellectual property and corporate lawFor those interested in cross-border projects and financing, please feel free to contact our team for more information.\nFinancial capital and cross-border transactions involving foreign entities.For any questions or difficulties, please contact us via the column's contact information.Special servicesTeam.

VI. Frequently Asked Questions

Q1: If the employer goes bankrupt, can I still recover my project payment?

This can be claimed in accordance with the law. The creditor shall declare the claim to the administrator within the declaration period and simultaneously claim the right of priority compensation for the construction project price, which takes precedence over the mortgage right and other creditor's rights.

Q2: What materials are required to declare a claim for project payment?

It is necessary to submit the construction contract, the project quantity and settlement documents, the visa form, the payment records, the explanation of the amount owed, and the supporting materials for the priority right of compensation, and handle them according to the list provided by the manager.

Q3: Does it cost money to declare a claim?

The declaration itself is usually free of charge; participating in bankruptcy proceedings may incur attorney fees and appraisal fees, and those who file supplementary declarations after the deadline will also bear the increased review fees resulting therefrom.

Q4: How long does the bankruptcy process usually take?

Depending on the progress of asset disposal and creditor review, the process may take a long time. Creditors should exercise their voting and objection rights in a timely manner and pay attention to the announcements made by the administrator.

Q5: What should I do if I miss the deadline for filing a tax return?

You can submit a supplementary declaration before the final distribution of the bankruptcy estate, but the distributions that have already taken place will not be redistributed, and you will need to bear the review fees. Therefore, you should submit the declaration as soon as possible.

The above answer is based on the judicial practice in Beijing. The adjudication guidelines in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Legal services for the purchase and sale of real estate·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is provided for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.