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

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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

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 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.


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