Your Wallet Could Be Impacted by Failing Businesses, Here's What You Can Do

As retailers and gyms continue to file for bankruptcy, any money you have with them, like gift cards, prepaid memberships or airline miles, may be at risk.

But it doesn't have to be.

As companies struggle to stay afloat many are looking for help with some finding it with Chapter 11 bankruptcy.

"That allows them [businesses] to get rid of debt and still stay in business," said Jenny Doling a bankruptcy attorney. "It also entails a lot of closures of stores."

Unlike Chapter 7 bankruptcy, where businesses liquidate assets and shut down for good, Chapter 11 allows companies to reorganize. But customers may lose out in the process.

Doling said if you have a gift card with a bankrupt retailer, like JC Penny, JCrew or Neiman Marcus, they still have to honor it. But she said to use it now, just in case things get worse.

"If you hold a gift card, you're going to be treated as a general unsecured creditor," said Doling. "If you don't use that gift card immediately, you're going to lose your money."

Gyms like Gold's and 24 Hour Fitness, have also filed for Chapter 11 bankruptcy. Doling suggests members stop any "autopay" in case their location unexpectedly closes.

Gyms may offer deals to generate income, like "pay six months upfront, get three months free."

Doling says don't bite.

"It may sound like a good deal upfront, but right now when we’re in a very precarious economy," said Doling. "People should be very careful in protecting their money."

Doling recommends avoiding pre-paid deals like that with other bankrupt companies like rental car company Hertz because of the high risk leve.

"It’s risky," said Doling. "You’re not going to get that money back if they go under and not successful in the organization."

Although the airline businesses has been crushed, Doling thinks airlines will be okay, thanks to government bailout money. But she said if they do file for bankruptcy, they could take away your reward miles.

"If the airline files for bankruptcy and decides to restructure its rewards program in the bankruptcy, it can do that," said Doling.