Construction company halts work despite overpayment

My husband was against leaving all our money to the two eldest for the house construction (interest-free loan).
I was able to convince him to do it anyway. And now we have a mess.

that really has nothing to do with the topic here.
More about feelings of guilt. But we are the last point of contact for that.

Back to the topic!

At the request of the contractor, the security deposit is to be provided by withholding in such a way that the consumer retains the installment payments up to the total amount of the security owed.

I read this to mean that withholding is only compliant with the regulation if the request for this method comes from the contractor. If this is not the case and you have nevertheless acted in this way, this understandably leads to a dispute regarding the overpayment claimed in the post title; the contractor may consider you to be in default of payment and may derive measures such as cessation of work including dismantling of scaffolding and the like, as well as possibly regard you as a (co-)cause of insolvency. If the opponent’s "only my side is right" attitude is equally pronounced, a mediator has a difficult task.

as well as even seeing you as (co-)causers of an insolvency.

Due to lack of information, we like to speculate about various horror scenarios, this is the first time I've heard something like that. Is that really possible?

You are right about that. But in this matter, I only think about my family. My husband was against giving the two eldest all our money for the house construction (interest-free loan). I was able to convince him to do it anyway. And now we have this mess.

Did you conclude a loan agreement with the children?!! Within the family, turn the loan into a gift, and the children are off the hook from the situation.

I ask again: What do your children aka the builders say and think about the issue, how do they want to proceed and get out of this mess?

The target question has been arising in this thread for some time.

Thank you. Believe me, I know my goal.

That is the impression I have gained by now as well – and that the children's dwelling no longer seems to be part of it.

Is that really possible?

I only meant that causally, not in terms of insolvency law.

This is a really really terrible case. That something like this can happen in a country like Germany and basically happens daily is already shocking. I wish the OP and the family a lot of strength and endurance to get through this phase of life well. However, I don't believe the BU can sleep well. Because he basically MUST expect every day that someone is lying in wait for him and ... But of course, that doesn't help the OP either. May I ask how high the worst-case damage amount would be now? I am always a fan of "befriending" the worst case (even if there is still a chance for better). I mean, you are a family and several people are thus affected. So you could also distribute the damage among everyone so that it is not so drastic individually. This way, one might be able to look a bit more positively into the future. Either way, I wish you all success, luck, and perseverance. To everyone else who is planning their construction: Lots and lots of luck!