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Going out of Business

Consumers can lose out when a business closes, leaving them with worthless gift cards, lost deposits and unfilled orders.

To protect yourself from potential problems if a business you deal with shuts down, follow these tips:

  • Avoid paying for services more than a year in advance.
  • If you’re asked to put down a deposit for products or services you won’t receive until later, pay the smallest deposit possible.
  • Pay by credit card to increase your chances of being able to get your money back.
  • Spend gift cards quickly and only buy gift cards from established retailers.
  • Before you buy an extended warranty, verify its coverage and terms. If the store closes or if the warranty company goes out of business, the warranty may not be any good. Check with the manufacturer to see what, if any, warranty they offer.
  • If the business closes and you pay by credit card, you may be able to get your money back. Contact your credit card company as soon as possible and request a chargeback.
  • If you paid by check or cash and the business has filed for bankruptcy, you can file a claim with the bankruptcy court to try to get what you’re owed. Filing a claim with the bankruptcy court does not guarantee that you will get your money back.
  • If a store closes but has not filed for bankruptcy, you can take the business to small claims court if the money owed is less than $10,000.
  • If a store closes with something of yours inside, such as an appliance brought in for repair or a pre-paid special order, try contacting the owner.   If that doesn’t work, you should contact local law enforcement or consider small claims court.


When a business files for bankruptcy, federal bankruptcy law determines which of the creditors will be paid and how much money they will get. If you file a claim with the court, the amount of money you get back, if any, will be determined by how much money is available to pay creditors, the types of claims that are filed with the court, and how many claims are filed with the court. Here’s how the process works:

  • You can file a claim with the U.S. Bankruptcy Court where the company filed bankruptcy. Local stores would probably file for bankruptcy in North Carolina, while a national company may file where it is headquartered.
  • North Carolina has three U.S. Bankruptcy Courts: the Eastern District, which includes Raleigh and eastern North Carolina; the Middle District, which includes Greensboro, Winston-Salem, Durham and other parts of central North Carolina; and the Western District, which includes Charlotte, Asheville and western North Carolina.
  • In most cases, you’ll have 90 days from the date the business declared bankruptcy to file a claim with the court.
  • File your claim by filling out a proof of claim form. Contact the clerk of the bankruptcy court for a form, or download it online.
  • To fill out the form, you’ll need to know the identifying name and number of the bankruptcy case, information you can get from the court. You’ll also need to provide copies of receipts or other paperwork.

We Can Help

If you have a question about a business closing or bankruptcy, contact us for help or call toll-free within North Carolina at 1-877-5-NO-SCAM.