Paypal automatically freezes the sellers account. Seller can still receive incoming money from others into their account, but cannot send or withdraw money from that balance. If balance is $0, you get nothing back if you paid with your current paypal balance from your said account. You will have more protection if you paid with a personal credit card instead of using your paypal balance. You then can file a claim with your credit card too. Paypal sucks, but its one of the current fastest way to send and receive money. Though PayPal's fees and some polices sucks, Paypal is always updating their buyers protection and other policies.
