Bankruptcy

When Retailers Go Broke: The Flip Side of Bankruptcy for Consumers

If you have a Sharper Image gift card lying around … well, I’m sorry to tell you but it’s worthless, at least for now. The company, which filed for Chapter 11 reorganization recently, suspended the acceptance of previously issued gift cards  until further notice pending a workout and acceptance of its plan for repayment of its obligations.

This is just one of the many downsides for consumers when companies declare bankruptcy. I’ve heard from several out of state callers recently who were stunned to find out that a local furniture company, from whom they’d made purchases on the internet, had declared bankruptcy. No refunds. No furniture. If the company files Chapter 7, what can the consumers do? Not much, absent a showing of fraud.

So, if you’ve got a gift card lying around, use it quickly! Who knows what can happen in this recessionary economy?

© 2008 SC Bankruptcy & Consumer Law Blog.