In any general assignment for the benefit of creditors, the following claims shall have priority, subordinate to the priorities for labor claims under Section 1204, but prior to all other unsecured claims: allowed unsecured claims of individuals, to the extent of nine hundred dollars ($900) for each such individual, arising from the deposit, before the commencement of the case, of money in connection with the purchase, lease, or rental of property, or the purchase of services, for the personal, family, or household use of such individuals, that were not delivered or provided. The priority granted by this section shall be subordinate to that granted by Sections 18933 and 26312 of the Revenue and Taxation Code.
§ 1204.5.Claims Having Priority But Subordinate to Priorities of Labor Claims
Title 4. Of the Enforcement of Liens · Chapter 3. Certain Liens and Priorities for Salaries, Wages and Consumer Debts · Last amended 1980 · Last verified July 29, 2026
In one sentenceSection 1204.5 gives consumer deposit claims of up to $900 per individual -- for undelivered goods or services paid for in advance -- priority in a general assignment for the benefit of creditors, ranking behind the labor claims of § 1204 but ahead of all other unsecured claims except certain state tax priorities.
Full Text of § 1204.5
Plain-English Summary
This section protects ordinary consumers caught up in a business failure. When a business makes a general assignment for the benefit of creditors, an individual who paid a deposit before the case began — for goods or services meant for personal, family, or household use that were never delivered or provided — gets priority for that unsecured claim, up to $900 per person.
That priority slots into a specific place in line: subordinate to the labor-claim priorities § 1204 establishes, but ahead of every other unsecured claim. There's one more layer above even this consumer priority, though — it's itself subordinate to the tax priorities set out in Revenue and Taxation Code §§ 18933 and 26312.
Frequently Asked Questions
Who benefits from the priority in this section?
An individual who, before a business's general assignment for the benefit of creditors, deposited money to buy, lease, or rent property or services for personal, family, or household use that was never delivered or provided.
How much of that consumer deposit gets priority?
Up to $900 for each individual.
Where does this consumer priority rank compared to unpaid wage claims?
Behind the labor-claim priorities of § 1204, but ahead of all other unsecured claims.
Is this consumer priority the very top of the priority list?
No. It's subordinate to the tax priorities established by Revenue and Taxation Code §§ 18933 and 26312.
Amendment History
Amended by Stats. 1980, Ch. 135, Sec. 5.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 29, 2026.
· Official source
Also known as: consumer deposit priority assignment for benefit of creditors california