diff --git a/core/src/main/java/com/google/bitcoin/protocols/channels/PaymentChannelClient.java b/core/src/main/java/com/google/bitcoin/protocols/channels/PaymentChannelClient.java
index 382aec78..eabd2e97 100644
--- a/core/src/main/java/com/google/bitcoin/protocols/channels/PaymentChannelClient.java
+++ b/core/src/main/java/com/google/bitcoin/protocols/channels/PaymentChannelClient.java
@@ -346,7 +346,7 @@ public class PaymentChannelClient {
 
             StoredPaymentChannelClientStates channels = (StoredPaymentChannelClientStates) wallet.getExtensions().get(StoredPaymentChannelClientStates.EXTENSION_ID);
             if (channels != null)
-                storedChannel = channels.getInactiveChannelById(serverId);
+                storedChannel = channels.getUsableChannelForServerID(serverId);
 
             step = InitStep.WAITING_FOR_VERSION_NEGOTIATION;
 
diff --git a/core/src/main/java/com/google/bitcoin/protocols/channels/StoredPaymentChannelClientStates.java b/core/src/main/java/com/google/bitcoin/protocols/channels/StoredPaymentChannelClientStates.java
index 4edbe058..8ea1f14a 100644
--- a/core/src/main/java/com/google/bitcoin/protocols/channels/StoredPaymentChannelClientStates.java
+++ b/core/src/main/java/com/google/bitcoin/protocols/channels/StoredPaymentChannelClientStates.java
@@ -23,6 +23,7 @@ import com.google.common.collect.HashMultimap;
 import com.google.protobuf.ByteString;
 import net.jcip.annotations.GuardedBy;
 
+import javax.annotation.Nullable;
 import java.math.BigInteger;
 import java.util.Date;
 import java.util.Set;
@@ -61,12 +62,16 @@ public class StoredPaymentChannelClientStates implements WalletExtension {
     /**
      * Finds an inactive channel with the given id and returns it, or returns null.
      */
-    public StoredClientChannel getInactiveChannelById(Sha256Hash id) {
+    @Nullable
+    public StoredClientChannel getUsableChannelForServerID(Sha256Hash id) {
         lock.lock();
         try {
             Set<StoredClientChannel> setChannels = mapChannels.get(id);
             for (StoredClientChannel channel : setChannels) {
                 synchronized (channel) {
+                    // Check if the channel is usable (has money, inactive) and if so, activate it.
+                    if (channel.valueToMe.equals(BigInteger.ZERO))
+                        continue;
                     if (!channel.active) {
                         channel.active = true;
                         return channel;
@@ -244,7 +249,7 @@ class StoredClientChannel {
     @Override
     public String toString() {
         final String newline = String.format("%n");
-        return String.format("Stored client channel %s (%s)%n" +
+        return String.format("Stored client channel for server ID %s (%s)%n" +
                              "    Key:         %s%n" +
                              "    Value to me: %d%n" +
                              "    Refund fees: %d%n" +
diff --git a/core/src/test/java/com/google/bitcoin/protocols/channels/ChannelConnectionTest.java b/core/src/test/java/com/google/bitcoin/protocols/channels/ChannelConnectionTest.java
index 19a62818..25c05407 100644
--- a/core/src/test/java/com/google/bitcoin/protocols/channels/ChannelConnectionTest.java
+++ b/core/src/test/java/com/google/bitcoin/protocols/channels/ChannelConnectionTest.java
@@ -575,4 +575,43 @@ public class ChannelConnectionTest extends TestWithWallet {
         assertEquals(Protos.Error.ErrorCode.SYNTAX_ERROR, error.getError().getCode());
         assertEquals(CloseReason.REMOTE_SENT_INVALID_MESSAGE, pair.clientRecorder.q.take());
    }
+
+    @Test
+    public void testDontResumeEmptyChannels() throws Exception {
+        // Check that if the client has an empty channel that's being kept around in case we need to broadcast the
+        // refund, we don't accidentally try to resume it).
+
+        // Open up a normal channel.
+        Sha256Hash someServerId = Sha256Hash.ZERO_HASH;
+        ChannelTestUtils.RecordingPair pair = ChannelTestUtils.makeRecorders(serverWallet, mockBroadcaster);
+        pair.server.connectionOpen();
+        PaymentChannelClient client = new PaymentChannelClient(wallet, myKey, Utils.COIN, someServerId, pair.clientRecorder);
+        PaymentChannelServer server = pair.server;
+        client.connectionOpen();
+        server.receiveMessage(pair.clientRecorder.checkNextMsg(MessageType.CLIENT_VERSION));
+        client.receiveMessage(pair.serverRecorder.checkNextMsg(MessageType.SERVER_VERSION));
+        client.receiveMessage(pair.serverRecorder.checkNextMsg(MessageType.INITIATE));
+        server.receiveMessage(pair.clientRecorder.checkNextMsg(MessageType.PROVIDE_REFUND));
+        client.receiveMessage(pair.serverRecorder.checkNextMsg(MessageType.RETURN_REFUND));
+        broadcastTxPause.release();
+        server.receiveMessage(pair.clientRecorder.checkNextMsg(MessageType.PROVIDE_CONTRACT));
+        broadcasts.take();
+        client.receiveMessage(pair.serverRecorder.checkNextMsg(MessageType.CHANNEL_OPEN));
+        Sha256Hash contractHash = (Sha256Hash) pair.serverRecorder.q.take();
+        pair.clientRecorder.checkOpened();
+        assertNull(pair.serverRecorder.q.poll());
+        assertNull(pair.clientRecorder.q.poll());
+        // Send the whole channel at once.
+        client.incrementPayment(Utils.COIN);
+        server.receiveMessage(pair.clientRecorder.checkNextMsg(MessageType.UPDATE_PAYMENT));
+        // The channel is now empty.
+        assertEquals(BigInteger.ZERO, client.state().getValueRefunded());
+        client.connectionClosed();
+
+        // Now try opening a new channel with the same server ID and verify the client asks for a new channel.
+        client = new PaymentChannelClient(wallet, myKey, Utils.COIN, someServerId, pair.clientRecorder);
+        client.connectionOpen();
+        Protos.TwoWayChannelMessage msg = pair.clientRecorder.checkNextMsg(MessageType.CLIENT_VERSION);
+        assertFalse(msg.getClientVersion().hasPreviousChannelContractHash());
+    }
 }