I recently have begun to notice a growing trend in consumer financing: leasing small personal property items such as beds, sofas, toys and other items normally financed as a sale. As the trend became more common, I began to wonder why such finance arrangements were suddenly showing up in almost all of our cases. The answer became frightfully clear with just a little research.

First, a little history. Leasing was traditionally reserved for small, niche retail outlets such as Rent-A-Center and Aarons. These establishments offered short term leases for electronics and furniture for temporary tenants who were looking to use an item for several weeks or months and then return the items with no future obligation. The leases were traditionally very expensive compared to the purchase of a similar personal property. A quick scan of any lease site will show that a 24 month lease (to own) of a 55” LG TV will be $59.99 per month for 24 months, or $1,439.76 total to own the TV. The same TV is $399.99 if you purchase it at your local Best Buy. The two deals are below:

Leasing was set up as a way for short term, high cost tenants to obtain items on an as needed basis without a long term commitment and a need to dispose of purchased items at the end of the short term stay. However, times have changed with respect to leasing.

Our office is now seeing leasing for any number of small personal items that were normally financed. It seems that financing companies have decided to enlist the power of the criminal court and Sheriff in order to save on collection costs. This is because of the Florida Statute Sec. 812.155 which provides that the failure to return leased property within 5 days of a certified letter demand to return the items may result in criminal prosecution. Any item with a value over $300 may result in a felony charge.

So, instead of the creditor being responsible for lawsuit costs, attorney costs and related collection expenses, finance companies can now just call the Sheriff’s office and have the State pick up the expense of collection. This is similar to the private education student loan scam that was so prevalent in the past few years. Charge exorbitant rates for tuition and then have the government pay you that rate and take the risk of non-payment and collection. Pretty good deal. Throw in the threat of some criminal penalties and you really can reduce your risk of non-payment at no extra expense.

Monetary compensation and not the return of the equipment is the goal of this scheme by finance companies. They don’t really want the used couch back from the renter. Instead, the goal is to have the consumer feel threatened by criminal prosecution and offer to pay the account off.

These leases are typically just disguised sales that are subject to the same rules as financed items in a Chapter 7 or Chapter 13 case. Our office uses the Federal Bankruptcy Code to prevent the threat of criminal prosecution with the use of redemption in Chapter 7 and valuation in Chapter 13 cases. In either situation, we can usually allow the retention of the leased items for what is generally a greatly reduced sum. Give us a call to explore your options based on your individual situation. We will be happy to set you up a free consultation with an attorney to discuss your legal rights.

At Mickler & Mickler, we personally attend court hearings on an almost daily basis. We keep up with the latest developments in bankruptcy law and related areas. We can provide you the type of bankruptcy advice which will allow you to make the best financial decision for your situation. Please feel free to contact our office with any bankruptcy related questions at 904-725-0822 or

Bryan K. Mickler