Can I go to small claims court to get a refund of pre-paid services if the business closed?

UPDATED: Sep 12, 2011

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UPDATED: Sep 12, 2011Fact Checked

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Can I go to small claims court to get a refund of pre-paid services if the business closed?

I was a patron of a laser treatment company and purchased services ahead of time; this gave me a discount and my husband purchased gift certificates for me. There is no indication of an expiration date. A little over a month ago I went in ther, and paid for a service as I was using my $450 credit for a pending appointment. Also. I had 2 “facial credits” (these I have no receipt from the place of business but could get this from my bank statements). Not long after I was there, I received an e-mail saying they had closed their business. I am out $450, plus facials. What can I do to get money back?

Asked on September 12, 2011 under General Practice, Colorado


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Legally, if you paid for services or treatments which you did not receive, you can sue for breach of contract to recover the unused portion of the money. Unfortunately, practically, there may be little or nothing you can do. If the business was a corporation ("inc.") or a limited liability company ("LLC"), then the owner(s) are not liable for business debts like this. That means that while you can sue the business itself, if it is out of business and no longer has assets or income, there's no way to collect, even if win; the owners can effectively simply walk away from business debts or obligations. On the other hand, if it was a sole proprietorship or a partnership or the like, then the owner(s) may still be liable on the debts, which means you could sue them personally as well as suing the business, greatly increasing your odds of a successful lawsuit.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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