I have not had an opportunity to read all of the other responses but here's my two cents:
RUN!!! If you can get the deposit back, get it and immediately cancel the contract. But I doubt they'll return it.
Frankly, if they've already filed for bankruptcy they are not allowed and not required to give you the deposit back as they have to account for all funds and cannot disperse to some creditors but not others; they're not required because bankruptcy gives them protection from their creditors - YOU - until a court-appointed trustee works out a plan. You'd have to file a proof of claim and get in line.
My guess is that they sense your husband's willingness to continue and may be preying on that -sorry I'm a realist and a bit jaded from what I've seen people go through recently with banks and builders in the last couple of years.
1. File a complaint with the NJ State Attorney General's office to get the help of consumer protection agents. Chadd Lackey, Esq. is a friend, and an attorney there. You can tell him Kim Thomas told you to call and he will help you or point you in the right direction;
2.. Get your own attorney, like YESTERDAY!
3. Start a paper trail. It is very important that you send a demand letter, in writing and by certified mail, to the builder with any demand you may have -- to get your contract canceled, to get your deposit back, etc.
4. Click on a link in web references to an attorney's answers to others who found themselves in the same situation as you now face.
Standard disclaimer: I am not an attorney and nothing I've said in this response should be interpreted as legal advice. it is general information and you should contact an attorney of your choice as soon as possible.
I live and work in the Mullica Hill area and there are MANY great homes only a year or two old available for sale. If you need a Realtor, or an attorney, give me a call. 856-308-5989
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Thanks for the opportunity to assist you!
Kimberly Thomas, Broker
Realty Executives, Brown & Pope
1101 Laurel Oak Rd. Ste. 110
Voorhees, NJ 08043
Read my blog at: www.ActiveRain.com/voorheesbroker