diff --git a/registrasion/controllers/invoice.py b/registrasion/controllers/invoice.py
index 616f418d..2c69faed 100644
--- a/registrasion/controllers/invoice.py
+++ b/registrasion/controllers/invoice.py
@@ -43,16 +43,16 @@ class InvoiceController(ForId, object):
             cart_controller = CartController(cart)
             cart_controller.validate_cart()  # Raises ValidationError on fail.
 
-            cls.void_all_invoices(cart)
+            cls.update_old_invoices(cart)
             invoice = cls._generate(cart)
 
         return cls(invoice)
 
     @classmethod
-    def void_all_invoices(cls, cart):
+    def update_old_invoices(cls, cart):
         invoices = commerce.Invoice.objects.filter(cart=cart).all()
         for invoice in invoices:
-            cls(invoice).void()
+            cls(invoice).update_status()
 
     @classmethod
     def resolve_discount_value(cls, item):
@@ -299,7 +299,11 @@ class InvoiceController(ForId, object):
     def update_validity(self):
         ''' Voids this invoice if the cart it is attached to has updated. '''
         if not self._invoice_matches_cart():
-            self.void()
+            if self.total_payments() > 0:
+                # Free up the payments made to this invoice
+                self.refund()
+            else:
+                self.void()
 
     def void(self):
         ''' Voids the invoice if it is valid to do so. '''
diff --git a/registrasion/tests/test_invoice.py b/registrasion/tests/test_invoice.py
index bd8c4340..6d36d082 100644
--- a/registrasion/tests/test_invoice.py
+++ b/registrasion/tests/test_invoice.py
@@ -534,6 +534,52 @@ class InvoiceTestCase(RegistrationCartTestCase):
         with self.assertRaises(ValidationError):
             invoice = TestingInvoiceController.for_cart(cart.cart)
 
+    def test_invoice_with_credit_note_applied_is_refunded(self):
+        ''' Invoices with partial payments should void when cart is updated.
+
+        Test for issue #64 -- applying a credit note to an invoice
+        means that invoice cannot be voided, and new invoices cannot be
+        created. '''
+
+        cart = TestingCartController.for_user(self.USER_1)
+
+        cart.add_to_cart(self.PROD_1, 1)
+        invoice = TestingInvoiceController.for_cart(cart.cart)
+
+        # Now get a credit note
+        invoice.pay("Lol", invoice.invoice.value)
+        invoice.refund()
+        cn = self._credit_note_for_invoice(invoice.invoice)
+
+        # Create a cart of higher value than the credit note
+        cart = TestingCartController.for_user(self.USER_1)
+        cart.add_to_cart(self.PROD_1, 2)
+
+        # Create a current invoice, and apply partial payments
+        invoice = TestingInvoiceController.for_cart(cart.cart)
+        cn.apply_to_invoice(invoice.invoice)
+
+        # Adding to cart will mean that the old invoice for this cart
+        # will be invalidated. A new invoice should be generated.
+        cart.add_to_cart(self.PROD_1, 1)
+        invoice = TestingInvoiceController.for_id(invoice.invoice.id)
+        invoice2 = TestingInvoiceController.for_cart(cart.cart)
+        cn2 = self._credit_note_for_invoice(invoice.invoice)
+
+        invoice._refresh()
+
+        # The first invoice should be refunded
+        self.assertEquals(
+            commerce.Invoice.STATUS_VOID,
+            invoice.invoice.status,
+        )
+
+        # Both credit notes should be for the same amount
+        self.assertEquals(
+            cn.credit_note.value,
+            cn2.credit_note.value,
+        )
+
     def test_sends_email_on_invoice_creation(self):
         invoice = self._invoice_containing_prod_1(1)
         self.assertEquals(1, len(self.emails))