You can sue them but if they are bankrupt then you re not going to get anything. The media has been warning about buying gift cards for Christmas for this same reason. if you buy it and the chain goes under (and most times there is no advanced warning) then your out of luck and are not going to get any money back. I would call them and ask about a refund and see what they say. If they say they do not have it if you have proof of what you still have owed to you then you could talk to a lawyer. Don t mean to sound negative but you are probably going to loose your money.
Yes you sue them in small claims court. Do it quickly before their creditors go after them.
No harm in trying to go to Small Claims court - but do it now!