Lease-to-Own computer from Rent-A-Center

[kellysmum]

Last week, before we had made the decision to file for bankruptcy, our computer died-the USB ports stopped working, the screen continually froze, the Internet did not work, etc. We consulted with a repair person and decided that, because the computer was almost five years old, it deserved an honorable discharge. But we needed a computer for my husband's job, and we needed it quickly. We had no credit cards to use, no one to borrow the money from, and our credit was too poor to open a charge account to purchase the computer with a store such as Best Buy. So we went to Rent A Center and found a computer we pay monthly "rent" on for a year. It is not a loan. It is a rental agreement. The computer is not in our name-it is in Rent A Center's name. So do we have to list this rental agreement as a creditor? What will happen if we do? Will they come and take the computer, even though we make our regular monthly payments?

[justbroke]

This is really a question for an attorney that practices Bankruptcy Law in Ohio. If your State, Ohio, treats these types of businesses (lease/rent to own) as lease agreements, then you would need to "assume" the lease in the bankruptcy. That means that you'd have to list it as an Executory Contract/Lease on Schedule G. If the State treats it as a purchase agreement (installment sale), then you could surrender, reaffirm or redeem the property. (Since you literally just obtained it, you may not be able to redeem, but that's a technical and legal question.)

From what I can tell, Ohio treats these types of "contracts" as leases. I cannot tell you what to put on which form and what the impact would be doing either. You might be able to reject the lease and then enter a new lease with them post petition, but that is all strategy and legal maneuvering.

I cannot tell you what Rent-A-Center would do, if they're familiar with lease rejection/assumption in bankruptcy, or what you should do. I just wanted to let you know how the "agreement" may be viewed in Ohio -- as a lease.

[btbeme]

The info I get from a couple people familiar with Rent-A-Center is that your contract is a lease. They will offer to take back the item or ask you to assume the lease.

Make sure it fits under your exemptions. In most cases the value of a used computer, unless it is a very special system, is pretty much zero; however, your lease and contract do place a value on it which is valid until the lease is complete (after which the value drops dramatically).

[Pandora]

May I recommend layaway at Walmart???

Rent-a-center or any type of place like that is going to cost you; you're going to end up paying double for any item that you could merely put on layaway (if that option is available).

Also - are you certain your computer is trash? Have you run scans on it? Just because a computer is 5 years old doesnt mean its trash. Ours is a 2002 and works perfectly fine. We've upgraded the RAM and storage so it works perfectly.

Food for thought ;)