Customers who paid deposits or prepayments to a business that then makes an ABC face the unpleasant reality that they are unsecured creditors. But the handling of their claims has customer relations and regulatory dimensions that simple trade claims don’t.
Customer Deposit Claims
Customer deposits and prepayments are unsecured claims in the ABC — customers share pro-rata with other unsecured creditors. In some industries, regulations may require that customer deposits be held in trust or escrow, which would give those funds a different status.
Consumer protection laws may create additional obligations. California consumer protection statutes create obligations around certain types of customer deposits — particularly for home improvement, travel, and fitness memberships. Assignees who are administering businesses in these industries should review the applicable regulations before treating customer deposits as ordinary unsecured claims.
The California ABC System gives business owners and creditors the exact tools, templates, and step-by-step guidance to navigate an Assignment for Benefit of Creditors — faster and cheaper than bankruptcy. Request your free evaluation here.
California ABC System — Assignment for Benefit of Creditors 
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