CLEVELAND — Legal Analysis: With COVID-19 shutdowns causing businesses to close unexpectedly, people might be wondering whether they can get their money back for deposits they’ve paid for things in the future.
Maybe you recently started personal training and paid for several sessions up front, or you bought a gift card to a local restaurant and now you find out those companies aren’t just shutdown for now.
You find out they won’t be reopening, ever.
So what happens to that money? Can you get it back? Legally speaking, the answer is yes, but it might be tough.
Some people will definitely lose out because that money might no longer be there. As the saying goes, “you can’t squeeze blood out of a turnip.”
When a business closes, the first thing it has to do is pay off all debts. Those debts include deposits paid by customers, but there might be a lot of people in the same position, so it becomes a race to get a refund.
Consumers can always file a lawsuit to get try to get their money back, but depending on how much is at stake, it might not be worth the cost, or the effort.
If the business owes a lot of people money and files bankruptcy, a specific consumer's payment might have priority, but it also has to stack up against everyone else’s claim. In those cases, a court will decide who gets paid and in what order.
With all of this in mind, the simplest solution is to go straight to the source and ask directly for that refund.
With a little bit of luck, you may find yourself first in line to get paid back before everyone else starts asking, and any official debt settling process begins.
Stephanie Haney is licensed to practice law in both Ohio and California.
The information in this article is provided for general informational purposes only. None of the information in this article is offered, nor should it be construed, as legal advice on any matter.