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

[kellysmum]

I may have asked this question before. If so, I can't find it on this forum.

My husband and I, b/c we could not afford to buy a computer for our daughter (and our home) back in November, went to Rent A Center and leased/rented one beginning Nov. 17th. We have been making regular payments and want to keep the computer. There is nowhere on the bankruptcy worksheets for this type of transaction. Do I need to include this in the bankruptcy? If I don't, will Rent A Center be notified anyway of our bankruptcy and take the computer even though we're making regular, timely payments?

[Floridagail]

Your attorney will need to list it, all debts have to listed. They will get notification also. If you want to pay them after your bankruptcy you can. If not they could ask for the things back. I would wait to file at least 90 days from applying for new credit.

[kellysmum]

Floridagail,
What category do I list it under? I have it now under monthly household expenditures b/c it is a necessity to us. It is our only computer and our daughter needs it for her school work.

[justbroke]

What you have, with Rent-A-Center is technically a lease or "executory" contract. Whether you should or need to list it on Schedule G (as well as the Statement of Intentions) is a question of law. There's also a question of whether you need to "assume" the contract in the bankruptcy. Rent-A-Center will not be contacted unless they end up on your Creditors Matrix (by listing them as a creditor or "for notification" purposes on the Matrix). They should technically be on the Matrix if they are on Schedule G and your Statement of Intentions.

It seems that one only gets in trouble with Rent-A-Center if they are not paying. I can't tell you how Rent-A-Center would react to receiving a bankruptcy notice, but they'd be bound by the automatic stay. Rent-A-Center may make you reaffirm the debt -- even though you are just assuming (keeping) the debt.

The real question, though, is whether the Rent-A-Center contract is considered a lease (executory contract) in your State. If it is a true lease, then you'd need to list it and make your intentions known.

[Floridagail]

I would list it there, the attorney office will put on the right place on the petition.

[kellysmum]

I live in Ohio and it is considered an executory contract. I am concerned that the trustee, when looking at our monthly expenditures, will force us to surrender it. My mother pays the $111.00 per month directly to Rent A Center for us.

[justbroke]

I live in Ohio and it is considered an executory contract. I am concerned that the trustee, when looking at our monthly expenditures, will force us to surrender it. My mother pays the $111.00 per month directly to Rent A Center for us.

In a Chapter 7, Trustees do not force surrender. This is a lease, you can only "assume" or "reject" a lease. The Trustee really doesn't care. The problem would only come if Rent-A-Center requires a "reaffirmation" agreement. In that case, you would still do the reaffirmation but THAT would require a hearing before the judge.

[kellysmum]

Thanks for all the replies. There is a facet to this whole thing that I completely forgot until my husband brought it up-he uses the computer for his job when he works from home remotely. Does that have any effect on whether or not the trustee will reject or affirm the lease?

[bcohen]

I live in Ohio and it is considered an executory contract. I am concerned that the trustee, when looking at our monthly expenditures, will force us to surrender it. My mother pays the $111.00 per month directly to Rent A Center for us.

Holy cr@p! $111 a month to use a computer that you do not own? What a joke! Every day of the week, I see used desktop computers WITH a flatscreen monitor, keyboard, and mouse for $100 or less, and good used laptops for $125 or less on Craigslist. I bought my desktop for $50 on Craigslist, and it came complete with the keyboard, mouse, and an LCD monitor. I bought my laptop used too, and I paid only $100 for it. Both work fine, and have never given me any problems.

Edited to add: As a side note, if you quit paying, and then file for bankruptcy, you can probably continue to use the computer for a couple of months payment-free (because the automatic stay will prevent Rent-A-Center from repossessing it) and then use the money you save to buy a decent used computer.

[EandGWZ]

^ I was trying to restrain myself (since we are on a bk forum) but this post is 100% spot on. RAC is the equivalent of a company that charges you 300% interest on a loan, they prey on the poor, no different than your neighborhood thug.

[lillymarlene]

Another alternative would be to use your small neighborhood computer store (not one of the big national chains.) I needed a second computer, when I had my retail location a few years ago, and got a refurbished computer with keyboard, mouse, for about $100. I had my own monitor, but that could have been included for another $50.