How do I recover a deposit from a contractor who didn't do the work?

Deposit recovery follows a strict order of operations. Skipping or rearranging steps weakens your eventual claim.

Step 1: Document everything. Save the contract, every text and email, all payment records, and dated photos of any work done (or not done). Get written statements from any subcontractors who showed up. This is your evidence package.

Step 2: Send a certified-mail demand letter. Spell out the contract, the amount paid, the work delivered, the deficiency, and a firm refund deadline (10-14 days standard). Many states require this notice as a precondition to legal action. Return receipt confirms delivery.

Step 3: Credit-card chargeback. If the deposit was paid by credit card, dispute the charge within 60 days of the statement (some issuers extend to 120). Cite "services not rendered." This is usually your fastest recovery.

Step 4: State licensing board complaint. Every state contractor licensing board has a complaint process. California CSLB issues citations and can order restitution. Arizona ROC's Residential Recovery Fund pays up to $30,000 per claim against a licensed contractor. Oregon CCB pays up to $20,000 for residential claims. File the complaint with full documentation.

Step 5: Bond claim. Every licensed contractor carries a surety bond. The surety company is listed on the contractor's license lookup. File a bond claim directly with the surety — this is faster than waiting for state board adjudication. The bond pays first-dollar for valid claims up to the bond limit.

Step 6: Small claims court. For amounts under your state's limit ($5,000 in Kentucky, $10,000 in California, $25,000 in Tennessee), small claims is fast (30-90 days) and does not require an attorney. Sue the contractor and the LLC.

Step 7: Civil court for larger amounts. Above small claims limits, you need an attorney and a full lawsuit. Costs $5,000-$15,000 in attorney fees; only worth it if the contractor has assets.

Step 8: Collect the judgment. Winning the lawsuit is not the same as getting paid. Use the judgment to file a lien against any property the contractor owns, garnish bank accounts (requires post-judgment discovery to locate them), and submit the judgment to the state recovery fund or bond.

Step 9: If the contractor disappeared or filed a new LLC, run Groundcheck (earthmove.io/trust). The phoenix-detection check finds new entities the same operator has formed — that strengthens a fraud claim and helps the state AG pursue criminal charges.

Step 10: Criminal complaint. If the deposit exceeds your state's grand-theft threshold ($950 in California, $2,500 in Texas, $1,000 in Florida) and there is evidence of intent (the contractor took deposits from multiple homeowners and disappeared), file a criminal complaint with the state AG or local DA. Contractor fraud above the felony threshold is prosecutable.

Realistic recovery rates: credit-card chargeback within 60 days has the highest success rate (~70%). Bond claims and state recovery funds are next (~50% if the contractor was licensed). Civil judgments collect ~20% of the face amount on average. Unlicensed contractors are nearly impossible to recover from — their bonds don't exist, they have no assets, and they often have already dissolved the LLC.