diff --git a/contracts/sharpy/src/events.rs b/contracts/sharpy/src/events.rs
index 161413a..adf4554 100644
--- a/contracts/sharpy/src/events.rs
+++ b/contracts/sharpy/src/events.rs
@@ -83,3 +83,15 @@ pub fn dispute_raised(env: &Env, invoice_id: u64, creator: &Address) {
 pub fn dispute_resolved(env: &Env, invoice_id: u64, resolver: &Address, release: bool) {
     env.events().publish((symbol_short!("dsprslv"),), DisputeResolvedEvent { invoice_id, resolver: resolver.clone(), release });
 }
+
+#[contracttype]
+#[derive(Clone)]
+pub struct AccountBalanceClaimedEvent {
+    pub account: Address,
+    pub token: Address,
+    pub amount: i128,
+}
+
+pub fn account_balance_claimed(env: &Env, account: &Address, token: &Address, amount: i128) {
+    env.events().publish((symbol_short!("claimed"),), AccountBalanceClaimedEvent { account: account.clone(), token: token.clone(), amount });
+}
diff --git a/contracts/sharpy/src/lib.rs b/contracts/sharpy/src/lib.rs
index d4e39c6..121fc99 100644
--- a/contracts/sharpy/src/lib.rs
+++ b/contracts/sharpy/src/lib.rs
@@ -24,6 +24,9 @@ fn escrow_state_key(id: u64) -> (Symbol, u64) { (symbol_short!("escrow"), id) }
 fn recurring_params_key(id: u64) -> (Symbol, u64) { (symbol_short!("rec"), id) }
 fn next_invoice_key(id: u64) -> (Symbol, u64) { (symbol_short!("next_inv"), id) }
 fn creator_index_key(creator: &Address) -> (Symbol, Address) { (symbol_short!("by_ctr"), creator.clone()) }
+fn account_balance_key(account: &Address, token: &Address) -> (Symbol, Address, Address) {
+    (symbol_short!("acc_bal"), account.clone(), token.clone())
+}
 
 fn is_paused(env: &Env) -> bool {
     env.storage().persistent().get(&paused_key()).unwrap_or(false)
@@ -71,6 +74,18 @@ fn index_invoice_for_creator(env: &Env, creator: &Address, invoice_id: u64) {
     env.storage().persistent().extend_ttl(&key, 100_000, 6_307_200);
 }
 
+/// Credits an internal balance for an account+token pair when a direct transfer fails.
+/// Used in _release when a recipient cannot receive funds (no trustline, frozen account, etc.)
+/// The credited amount can be withdrawn later via claim().
+fn credit_account(env: &Env, account: &Address, token: &Address, amount: i128) {
+    let key = account_balance_key(account, token);
+    let current: i128 = env.storage().persistent().get(&key).unwrap_or(0);
+    // Use checked_add to prevent overflow if multiple failed transfers accumulate
+    let new_balance = current.checked_add(amount).expect("account balance overflow");
+    env.storage().persistent().set(&key, &new_balance);
+    env.storage().persistent().extend_ttl(&key, 100_000, 6_307_200);
+}
+
 fn build_invoice(
     env: &Env,
     creator: Address,
@@ -390,7 +405,8 @@ impl SharpyContract {
         for i in 0..n {
             let recipient = invoice.recipients.get(i).unwrap();
             let amount = invoice.amounts.get(i).unwrap();
-            let token_client = token::Client::new(env, &invoice.tokens.get(i).expect("no token"));
+            let token = invoice.tokens.get(i).expect("no token");
+            let token_client = token::Client::new(env, &token);
 
             let proportional = if !invoice.split_rules.is_empty() {
                 match invoice.split_rules.get(i as u32).unwrap() {
@@ -433,7 +449,17 @@ impl SharpyContract {
 
             distributed += proportional;
             if proportional > 0 {
-                token_client.transfer(&env.current_contract_address(), &recipient, &proportional);
+                // Use try_transfer to catch failures (no trustline, frozen account, etc.)
+                // On any failure, credit an internal balance that can be claimed later
+                match token_client.try_transfer(&env.current_contract_address(), &recipient, &proportional) {
+                    Ok(Ok(())) => {
+                        // Transfer succeeded — no action needed
+                    }
+                    _ => {
+                        // Transfer failed — credit internal balance for later claim
+                        credit_account(env, &recipient, &token, proportional);
+                    }
+                }
             }
         }
 
@@ -649,6 +675,44 @@ impl SharpyContract {
             .unwrap_or_else(|| Vec::new(&env))
     }
 
+    /// Returns the claimable balance for a given account and token.
+    /// Balances accumulate when recipient transfers fail during invoice release.
+    /// Returns 0 if no balance exists.
+    pub fn get_claimable_balance(env: Env, account: Address, token: Address) -> i128 {
+        env.storage()
+            .persistent()
+            .get(&account_balance_key(&account, &token))
+            .unwrap_or(0)
+    }
+
+    /// Withdraws a credited balance for an account and token.
+    /// Permissionless — anyone can trigger the claim for any account.
+    /// The transfer goes from the contract vault to the account.
+    /// 
+    /// # Panics
+    /// - If the claimable balance is zero
+    /// - If the token transfer fails (e.g., account still has no trustline)
+    /// 
+    /// # Security
+    /// - CEI pattern: storage is deleted before the transfer (defense-in-depth)
+    /// - Checked arithmetic prevents overflow (balance accumulation uses checked_add)
+    /// - Composite key (account, token) prevents collision
+    pub fn claim(env: Env, account: Address, token: Address) -> i128 {
+        require_not_paused(&env);
+        let key = account_balance_key(&account, &token);
+        let balance: i128 = env.storage().persistent().get(&key).unwrap_or(0);
+        assert!(balance > 0, "no claimable balance");
+
+        // CEI pattern: delete storage BEFORE transfer (even though Soroban has no reentrancy)
+        env.storage().persistent().remove(&key);
+
+        let token_client = token::Client::new(&env, &token);
+        token_client.transfer(&env.current_contract_address(), &account, &balance);
+
+        events::account_balance_claimed(&env, &account, &token, balance);
+        balance
+    }
+
     /// Returns a SHA-256 fingerprint of the invoice's immutable fields.
     /// Protocol 25 CAP-75 / Protocol 26 crypto module: deterministic, tamper-evident
     /// content hash. The fingerprint commits to invoice_id, deadline, funded amount,
diff --git a/contracts/sharpy/src/test.rs b/contracts/sharpy/src/test.rs
index 2a92f14..c5c5a7b 100644
--- a/contracts/sharpy/src/test.rs
+++ b/contracts/sharpy/src/test.rs
@@ -835,4 +835,150 @@ mod tests {
         assert_eq!(ids.len(), 1);
         assert_eq!(ids.get(0).unwrap(), id);
     }
+
+    // -----------------------------------------------------------------------
+    // Fallback balance recovery tests
+    // -----------------------------------------------------------------------
+
+    #[test]
+    fn test_get_claimable_balance_returns_zero_initially() {
+        let (env, client) = setup();
+        let account = Address::generate(&env);
+        let token = Address::generate(&env);
+
+        let balance = client.get_claimable_balance(&account, &token);
+        assert_eq!(balance, 0i128);
+    }
+
+    #[test]
+    #[should_panic(expected = "no claimable balance")]
+    fn test_claim_with_zero_balance_fails() {
+        let (env, client) = setup();
+        let account = Address::generate(&env);
+        let token = Address::generate(&env);
+
+        // Attempting to claim with no balance should panic
+        client.claim(&account, &token);
+    }
+
+    #[test]
+    fn test_claim_withdraws_credited_balance() {
+        let (env, client) = setup();
+        let account = Address::generate(&env);
+        let admin = Address::generate(&env);
+        let token = env.register_stellar_asset_contract(admin.clone());
+        let sac = token::StellarAssetClient::new(&env, &token);
+
+        // Mint tokens to the contract (simulating failed transfer funds held in vault)
+        let contract_addr = client.address.clone();
+        sac.mint(&contract_addr, &1000i128);
+
+        // Manually credit a balance (simulating what would happen on failed transfer)
+        // We do this by directly manipulating storage since credit_account is private
+        use soroban_sdk::symbol_short;
+        let key = (symbol_short!("acc_bal"), account.clone(), token.clone());
+        env.as_contract(&contract_addr, || {
+            env.storage().persistent().set(&key, &500i128);
+            env.storage().persistent().extend_ttl(&key, 100_000, 6_307_200);
+        });
+
+        // Verify balance is queryable
+        let balance_before = client.get_claimable_balance(&account, &token);
+        assert_eq!(balance_before, 500i128);
+
+        // Claim should transfer the balance
+        let claimed = client.claim(&account, &token);
+        assert_eq!(claimed, 500i128);
+
+        // Balance should now be zero
+        let balance_after = client.get_claimable_balance(&account, &token);
+        assert_eq!(balance_after, 0i128);
+
+        // Account should have received the tokens
+        assert_eq!(sac.balance(&account), 500i128);
+    }
+
+    #[test]
+    #[should_panic(expected = "no claimable balance")]
+    fn test_claim_twice_fails() {
+        let (env, client) = setup();
+        let account = Address::generate(&env);
+        let admin = Address::generate(&env);
+        let token = env.register_stellar_asset_contract(admin.clone());
+        let sac = token::StellarAssetClient::new(&env, &token);
+
+        let contract_addr = client.address.clone();
+        sac.mint(&contract_addr, &1000i128);
+
+        // Credit balance
+        use soroban_sdk::symbol_short;
+        let key = (symbol_short!("acc_bal"), account.clone(), token.clone());
+        env.as_contract(&contract_addr, || {
+            env.storage().persistent().set(&key, &500i128);
+            env.storage().persistent().extend_ttl(&key, 100_000, 6_307_200);
+        });
+
+        // First claim succeeds
+        client.claim(&account, &token);
+
+        // Second claim should panic
+        client.claim(&account, &token);
+    }
+
+    #[test]
+    fn test_claimable_balance_accumulation() {
+        let (env, client) = setup();
+        let account = Address::generate(&env);
+        let admin = Address::generate(&env);
+        let token = env.register_stellar_asset_contract(admin.clone());
+        let sac = token::StellarAssetClient::new(&env, &token);
+
+        let contract_addr = client.address.clone();
+        sac.mint(&contract_addr, &2000i128);
+
+        // Simulate multiple failed transfers crediting the same account
+        use soroban_sdk::symbol_short;
+        let key = (symbol_short!("acc_bal"), account.clone(), token.clone());
+        env.as_contract(&contract_addr, || {
+            // First failure
+            let current1: i128 = env.storage().persistent().get(&key).unwrap_or(0);
+            env.storage().persistent().set(&key, &(current1 + 300i128));
+            // Second failure
+            let current2: i128 = env.storage().persistent().get(&key).unwrap_or(0);
+            env.storage().persistent().set(&key, &(current2 + 700i128));
+        });
+
+        // Balance should be sum of all failures
+        let balance = client.get_claimable_balance(&account, &token);
+        assert_eq!(balance, 1000i128);
+
+        // Claim should withdraw the full accumulated amount
+        let claimed = client.claim(&account, &token);
+        assert_eq!(claimed, 1000i128);
+        assert_eq!(sac.balance(&account), 1000i128);
+    }
+
+    #[test]
+    fn test_claimable_balance_isolated_per_token() {
+        let (env, client) = setup();
+        let account = Address::generate(&env);
+        let admin = Address::generate(&env);
+        let token_a = env.register_stellar_asset_contract(admin.clone());
+        let token_b = env.register_stellar_asset_contract(admin.clone());
+
+        let contract_addr = client.address.clone();
+
+        // Credit balances for two different tokens
+        use soroban_sdk::symbol_short;
+        let key_a = (symbol_short!("acc_bal"), account.clone(), token_a.clone());
+        let key_b = (symbol_short!("acc_bal"), account.clone(), token_b.clone());
+        env.as_contract(&contract_addr, || {
+            env.storage().persistent().set(&key_a, &500i128);
+            env.storage().persistent().set(&key_b, &300i128);
+        });
+
+        // Balances should be independent
+        assert_eq!(client.get_claimable_balance(&account, &token_a), 500i128);
+        assert_eq!(client.get_claimable_balance(&account, &token_b), 300i128);
+    }
 }