Company Bankruptcy Refund Guide 2026: How to Get Your Money Back When a Store Closes or Goes Out of Business

Commercial Chapter 11 filings increased 76% in January 2026 compared to January 2025, according to data from Epiq AACER released by the American Bankruptcy Institute. Small business filings under Subchapter V jumped 67% over the same period. More than 8,100 stores closed across the U.S. in 2025, according to Coresight Research — and 2026 is on track to match or exceed that pace.

So far in 2026, Saks Global (parent of Saks Fifth Avenue and Neiman Marcus), LKM Convenience, and Francesca's (closing all ~450 stores) have already filed for bankruptcy. Amazon is shuttering all Amazon Fresh and Amazon Go locations. GameStop plans to close hundreds of locations. Rite Aid, Joann, Party City, and Big Lots drove the 2025 closures.

When a company goes bankrupt or suddenly closes, consumers are left with unanswered questions: What happens to my gift cards? My warranty? The furniture I paid for but never received? My gym membership? The deposit I put down?

The answers depend on the type of bankruptcy, how you paid, and how quickly you act. Here is everything you need to know.

Understanding the Types of Bankruptcy

Chapter 7 — Liquidation

The company shuts down and a court-appointed trustee sells all assets to pay creditors. The business stops operating. This is the worst-case scenario for consumers trying to recover money.

• Assets are sold and the proceeds distributed to creditors in priority order
• Consumers are unsecured creditors — near the bottom of the priority list
• Recovery is often pennies on the dollar, if anything
• Gift cards are typically no longer redeemable once liquidation begins

Chapter 11 — Reorganization

The company attempts to restructure its debts and continue operating. This is more common for large retailers.

• The business typically keeps operating during the restructuring
• Gift cards may still be honored for a limited time — but not always
• The company may ask the bankruptcy court for permission to honor gift cards and customer programs
• A reorganization plan is filed with the court, outlining how creditors will be paid
• If the reorganization fails, the case may convert to Chapter 7

Subchapter V — Small Business Reorganization

A streamlined Chapter 11 process for small businesses (debts under roughly $7.5 million). Filings under this chapter increased 67% in Q1 2026 compared to the prior year.

• Faster process with fewer reporting requirements
• The business typically keeps operating
• Consumers face similar risks as in Chapter 11

Assignment for the Benefit of Creditors (ABC)

Some companies avoid formal bankruptcy by assigning their assets to a third party who liquidates them and distributes proceeds. This is a state-law process that moves faster than federal bankruptcy but offers consumers even less protection.

Recovery Options by What You're Owed

1. Unreceived Merchandise or Services

You paid for something the company never delivered — furniture, appliances, home improvement work, event tickets.

Best option: Credit card chargeback

• If you paid by credit card, call your card issuer immediately and request a chargeback for "goods not received"
• You have 60 days from the statement date to file a written dispute under the Fair Credit Billing Act (FCBA)
• Many card networks allow chargebacks for up to 120 days from the transaction date
• Visa and Mastercard have specific rules for merchant bankruptcy — the card network can process the chargeback because the merchant failed to provide the purchased goods

Steps:

1. Call the number on the back of your credit card
2. State: "I paid for [item/service] from [company] which has filed for bankruptcy / closed. I never received what I paid for."
3. Request a chargeback under reason code "goods not received" or "services not rendered"
4. Follow up in writing within 10 business days
5. Provide any documentation: order confirmation, receipt, email correspondence showing the company acknowledged your order

Beyond the 60-day window — the "claims and defenses" provision:

Even if you missed the 60-day dispute window, you have up to one year from the statement date to request a chargeback under the "claims and defenses" provision of the Fair Credit Billing Act. Requirements:

• The disputed amount must be over $50
• You must have made a good-faith effort to resolve the issue directly with the seller
• You can only dispute up to the outstanding balance on your card
• The merchant must be within 100 miles of your home and in your home state

If you paid by debit card:

• Report to your bank immediately
• You have 2 business days to limit liability to $50, up to 60 days for $500 max liability
• After 60 days, unlimited liability under Regulation E
• Recovery is harder because the money has already left your account

If you paid by cash or check:

• File a Proof of Claim with the bankruptcy court (see below)
• You are an unsecured creditor — last in line for payment
• Recovery is unlikely unless there are significant assets

2. Gift Cards

Gift cards are treated as unsecured debt in bankruptcy — the company owes you the value of the card.

Immediate actions:

1. Try to use the card immediately — if the company is still operating (Chapter 11), the court may authorize continued acceptance of gift cards for a limited time
2. Check the bankruptcy court docket — look for orders regarding gift card redemption. Courts sometimes set specific windows during which gift cards must be used
3. Look for competitor offers — when a competitor acquires the bankrupt company's customers, they sometimes honor rival gift cards at a reduced rate to win new business
4. File a Proof of Claim — if you can't use the card, file a claim for its value with the bankruptcy court

Do not wait. When a store enters liquidation, the merchant typically no longer owns the inventory — a liquidation company takes over. At that point, gift cards are generally no longer redeemable. Use it or file a claim immediately.

California cash-out rights: Effective April 1, 2026, California requires businesses to provide cash refunds for gift card balances under $15 — the highest threshold in the nation. If you have a small-balance gift card from a California retailer, you can request cash back before the company closes.

3. Warranties and Protection Plans

When a company goes bankrupt, its warranty obligations become unsecured claims.

What to check:

1. Was the warranty backed by a third party? Many extended warranties and protection plans are underwritten by insurance companies, not the retailer. If so, your warranty may still be valid even if the retailer closes. Check the warranty document for the underwriter's name and contact them directly.
2. Manufacturer warranty vs. retailer warranty: If your product has a manufacturer warranty (e.g., Apple, Samsung, LG), that warranty is independent of the retailer. You can still get service directly from the manufacturer.
3. State warranty laws: Some states have laws that protect consumers when a business fails to honor a warranty. Check with your state Attorney General's office.

4. Deposits and Prepayments

If you put down a deposit for furniture, home improvement work, event catering, or other services:

1. Request a refund in writing — send a certified letter to the company's last known address. Even closed businesses have mail forwarded
2. Credit card chargeback — if you paid by credit card, dispute the deposit charge as "services not rendered"
3. File a Proof of Claim — deposits are generally treated as unsecured claims
4. Contact your state Attorney General — some states have consumer protection funds that cover deposits from failed businesses
5. Check for escrow accounts — some states require contractors to hold deposits in escrow. If your state has such a law, the money may be protected

5. Store Credit and Loyalty Points

Store credit and loyalty points are treated as unsecured debt in bankruptcy:

• Points and miles: Generally lost when the company liquidates. If the program is partnered with an airline or hotel, the partner may honor some value
• Store credit: File a Proof of Claim for the full value
• Membership fees: If you paid for an annual membership and the company closes mid-year, file a claim for the prorated unused portion

How to File a Proof of Claim

A Proof of Claim (Official Bankruptcy Form 410) is how you tell the bankruptcy court that the company owes you money.

Step 1: Find the bankruptcy case

• Search PACER (pacer.uscourts.gov) — the federal courts' electronic filing system. Registration is free; there's a small per-page fee for documents
• Search by company name in the bankruptcy court for the district where the company is headquartered
• Bankruptcy filings are public record

Step 2: Get the Proof of Claim form

• Download Form 410 from the U.S. Courts website (uscourts.gov)
• Some bankruptcy cases have a dedicated website or claims agent with online filing

Step 3: Fill out the form

• Your information: Name, address, phone, email
• Debtor information: The bankrupt company's name and case number
• Amount owed: The total value of your claim (gift card balance, deposit amount, etc.)
• Basis for claim: Select "Goods Sold or Delivered" or "Other" and describe (e.g., "Unredeemed gift card" or "Deposit for undelivered furniture")
• Supporting documentation: Attach copies of receipts, gift cards, order confirmations, contracts, or any other proof

Step 4: File the claim

• File electronically through PACER or the claims agent
• Or mail the original form to the clerk of the bankruptcy court handling the case
• Keep a copy for your records

Step 5: Monitor the case

• Bankruptcy cases can take months to years to resolve
• Check the case docket periodically for updates on distribution plans
• Sign up for case notifications through PACER if available

What NOT to Do

Don't wait to act

The automatic stay that goes into effect when a company files for bankruptcy prevents most collection actions. File your chargeback before the bankruptcy petition if possible.

Don't throw away gift cards

Even if the company is in liquidation, hold onto gift cards. Courts sometimes extend redemption deadlines, and competitors occasionally honor them. A gift card is proof of your claim.

Don't ignore the bankruptcy notices

If you receive a notice about a company's bankruptcy case, read it carefully. It will contain deadlines for filing claims and information about whether gift cards or warranties are being honored.

Don't assume you'll be contacted

The bankruptcy court may not notify every individual customer. You need to actively monitor the case through PACER.

Notable 2025-2026 Retail Bankruptcies and Closures

| Company | Year | Type | Status | |---|---|---|---| | Rite Aid | 2025 | Chapter 11 | Closed hundreds of stores; restructured | | Joann | 2025 | Chapter 11 | Liquidated all stores | | Party City | 2025 | Chapter 11 | Liquidated all stores | | Big Lots | 2025 | Chapter 11 | Closed hundreds of stores | | Francesca's | 2026 | Liquidation | Closing all ~450 stores | | Saks Global | 2026 | Chapter 11 | Restructuring Saks and Neiman Marcus | | Amazon Fresh/Go | 2026 | Closure | Closing all locations; some converting to Whole Foods | | GameStop | 2026 | Closure | Closing hundreds of locations | | Walgreens | 2025-2026 | Closure | Shrinking store footprint | | CVS | 2025-2026 | Closure | Shrinking store footprint |

Prevention: How to Protect Yourself

Pay by credit card

Credit cards offer the strongest consumer protection. Under the Fair Credit Billing Act, you can dispute charges for undelivered goods or services. Credit card chargebacks are your single best recovery tool when a business fails.

Avoid large cash deposits

For big-ticket items (furniture, appliances, home improvement), avoid paying large deposits in cash or by check. Use a credit card so you can dispute the charge if the company doesn't deliver.

Use gift cards quickly

Don't hold gift cards for extended periods. Use them within weeks of receiving them. The longer you hold them, the higher the risk that the retailer will enter bankruptcy.

Check the retailer's financial health

Before making a large purchase from a retailer, check:

• Recent news about the company's financial condition
• Whether the company has announced store closures
• The company's Better Business Bureau rating
• Customer complaint patterns

Use third-party warranty providers

If buying an extended warranty, choose one backed by a reputable insurance company rather than the retailer's in-house plan. Third-party warranties survive the retailer's bankruptcy.

Keep documentation

Save receipts, order confirmations, contracts, and warranty documents. These are essential for filing chargebacks, Proof of Claim forms, and disputes.

Frequently Asked Questions

Can I file a chargeback if the company already filed for bankruptcy?

Possibly, but it's harder. The automatic stay in bankruptcy prevents most collection actions, and chargebacks can be considered collection activity. Your chances are better if you file the chargeback before the bankruptcy petition. Some credit card networks have specific rules for bankruptcy situations — call your issuer and ask.

What happens to my warranty if the store closes?

Manufacturer warranties (from Apple, Samsung, etc.) are unaffected — contact the manufacturer directly. Retailer warranties (like store-branded protection plans) become unsecured claims in bankruptcy. If the warranty is underwritten by a third-party insurance company, it may still be valid.

Will I get my gift card money back?

It depends on the type of bankruptcy. In Chapter 11, the court may authorize continued gift card acceptance for a limited window. In Chapter 7 liquidation, gift cards are usually worthless. File a Proof of Claim either way, but expect low recovery in liquidation.

What if the company didn't file bankruptcy — it just closed?

File complaints with your state Attorney General, the Better Business Bureau, and the Consumer Financial Protection Bureau (consumerfinance.gov). Send a certified letter to the company's last known address. If you paid by credit card, file a chargeback. Your options are actually broader outside of bankruptcy because the automatic stay doesn't apply.

How long does the bankruptcy process take?

Chapter 7 liquidation: typically 6-18 months. Chapter 11 reorganization: typically 1-3 years. Some complex cases take longer. You should file your Proof of Claim as early as possible and monitor the case docket for distribution announcements.

What about subscriptions and memberships?

If a subscription service (gym, streaming, subscription box) goes bankrupt:

• Cancel immediately through whatever channel is still available
• Dispute recent charges with your credit card company
• Contact your bank to stop future automatic payments
• File a Proof of Claim for any prepaid period

Key Takeaways

• Commercial bankruptcies surged 76% in early 2026, with 8,100+ stores closing in 2025
• Credit card chargebacks are your best recovery tool — file before the bankruptcy petition if possible
• Gift cards are unsecured debt in bankruptcy — use them immediately or file a Proof of Claim
• File a Proof of Claim (Form 410) through PACER at pacer.uscourts.gov for any money you're owed
• Don't wait — the automatic stay in bankruptcy limits your options once the petition is filed
• Manufacturer warranties survive retailer bankruptcy; retailer warranties typically do not
• Pay by credit card for large purchases to preserve your chargeback rights
• Use gift cards quickly — they become worthless in liquidation
• Keep all documentation — receipts, order confirmations, contracts, and warranty documents
• Unsecured creditors are last in line — expect pennies on the dollar, but file claims anyway

When a business fails, consumers face an uphill battle to recover their money. The system is designed to prioritize banks and secured lenders over individual customers. But by acting quickly — filing chargebacks before bankruptcy, using gift cards during redemption windows, and submitting Proof of Claim forms — you can improve your chances significantly.