What to do when a business closes its door

What is your recourse when you’ve paid for or ordered something through a business that all of a sudden shuts its door? “Out of Business” signs are usually accompanied by disconnected phones and unanswered email which can make it difficult to get a hold of the owner. However, the business is still obligated to provide the goods or services that have been paid for, or issue a refund if they can no longer provide the goods.

If you find yourself in this situation:

  • Write to the owner and keep copies of your correspondence. Mail is usually forwarded when a business closes.
  • If you do not receive what you’ve paid for and you paid via credit card, write to your credit card company to dispute the charges. Under federal law, you have 60 days after the charge first appears on a bill (this doesn’t work if you paid with a debit card).
  • Contact the landlord to inquire about gaining access to merchandise inside the property.
  • File a complaint with BBB at www.centraltx.bbb.org. If the company hasn’t closed completely, BBB will help you try to resolve the issue. If the company reopens, your complaint will follow it.
  • File a complaint with the Federal Trade Commission at www.ftc.gov. While the FTC cannot help resolve your complaint, the information it receives helps with its investigations.
  • If the company files for Chapter 7 bankruptcy, you have 90 days to file a claim with the bankruptcy court. Forms and more information are available at uscourts.gov.
  • If the company files for Chapter 11 bankruptcy, it means it intends to stay in business and needs time to reorganize. During this time, it usually honors contracts, gift cards, etc. and tries to fulfill delivery of all goods and services already purchased. Be persistence but patient during this time and it may work out.
  • If the company owner does not file for bankruptcy, you could file in small claims court.
  • Service warranties may still be honored by the manufacturer or a third party servicer. Contact the manufacturer to find out if another business in your area will honor the warranty.