RALEIGH, N.C. — Some homeowners and contractors claim Wake County home builder James Capps failed to follow through on promises. On Friday, he filed for bankruptcy, and homeowners are weighing their legal options.

The ripple effects from Capps and Associates' financial failures spread across eastern Wake County.

"This is a snowball effect. Once they have troubles on one house, they typically have troubles on all of their houses," attorney Bryan Rosenberg said.

Aside from unused escrow accounts, Rosenberg said buyers who have not yet closed on their homes have little recourse to recoup their money if a builder goes bankrupt. When unpaid subcontractors place liens on homes that have closed, owners do get protection.

"At least they're going to have a title insurance company who will defend the suit. If it's a valid claim, they're going to pay the claim off," Rosenberg said.

However, that does not apply to all owners. David Hersch's house appeared on the 2003 Parade of Homes. After closing, the builder sent out new contractors to take care of some unfinished work. Now, Hersh is on the hook.

"I didn't hire these people. I didn't ask them to come and work on the house," Hersh said. "I told them before they would come that I wasn't paying the bill. But, I contacted my attorney today and he said it's still a homeowner responsibility."

Now that bankruptcy has been filed, title insurance should pay some bills. Other creditors will have to get in line.

WRAL has also been contacted by another general contractor named James Capps who has no connection to Capps and Associates. He said the mistaken identity is now hurting his business.