Rent-to-Own Agreements and Bankruptcy in Alabama and Mississippi

At first glance, it may seem like a good plan to use a Rent-to-Own service to get the items you need. For example, Furniture and Appliances are popular, rent-to-own items. Why not, it is very attractive, for a small monthly payment you can outfit your home with everything you want, but, hidden in the details are traps and pitfalls.

What is a Rent-to-Own Agreement?

First, let’s define what a Rent-to-Own agreement is. This type of agreement allows a renter to make payments on a particular item, such as furniture or electronics, with the option to purchase the item at the end of the agreement. Rent-to-Own agreements are typically used by individuals who may not have the cash to purchase the item outright or who have poor credit and cannot obtain financing through traditional means.

What Happens if I Cannot Pay the Monthly Payment?

If you cannot make a payment, it’s best to contact your rent-to-own company and explain your situation. They may be able to work out a payment plan or other arrangement with you. It’s important to remember that if you don’t make payments and don’t return the item, you could face criminal charges.

In Alabama, if you fail to make a payment and don’t promptly return the item, you can be charged with a rental theft crime. The crime is a misdemeanor if the item’s value is $500 or less. But, if the value exceeds $500, the charge is a Class C felony. That means a possible prison sentence of up to 10 years and a fine of up to $15,000 for failing to return that overpriced refrigerator within 48 hours.

In Mississippi, the crime is a misdemeanor when the value of the personal property is less than $1,000.00 but can become a felony when the value of the property is $1,000.00 or more and punishable by a fine of up to $1,000.00 and or jail time of up to 5 years.

Will filing bankruptcy stop criminal charges and prosecution?

While filing for bankruptcy will not necessarily stop criminal charges for failing to make payments and not returning the item, it will at least temporarily stop the rent-to-own creditor from trying to collect the debt. When you file for bankruptcy, an “automatic stay” prevents all creditors, including rent-to-own companies, from pursuing repayment of debt. However, it’s important to note that filing for bankruptcy does not mean that you will be able to keep the item you rented. You may still be required to return it.

If you are in a Rent-to-Own agreement and cannot pay act now to protect yourself.

If you have a Rent-to-Own agreement and are considering filing for bankruptcy, it’s important to understand how bankruptcy may impact your agreement and what options you have moving forward. Speaking with an experienced bankruptcy attorney can help you navigate this process and ensure the best possible outcome for your specific situation. The debt relief attorneys at the Bond & Botes Law Offices are here to help you and will take the time to answer all your questions in an absolutely free and confidential consultation. Call the Bond & Botes Law Offices at 1-877-581-3396 or email us through our website today.