There are two main types of furniture and appliance debts in Illinois.
- Retail installment contracts: You buy the item now and pay over time. The seller or a finance company keeps a security interest in the item. That means the item is collateral for the loan. If you miss payments, they can repossess and may still sue you for the balance after resale.
- Rent-to-own rental-purchase agreements: You’re renting with the option to buy. You don’t own the item until you make all required payments. You can usually return it and stop future payments. You won’t get past payments back.
Legal protections
Rent-to-own:
- Contracts must be in plain English and disclose the cash price, total to own, whether the item is new or used, and your liability for loss/damage.
- Late fees are allowed only if you are 3+ days late and are capped at $5, and only one fee per missed payment.
- You have a right to reinstate by catching up within the later of one week or half the regular pay period. If the store takes the item back (without a court case) during that window, your reinstatement right extends at least 30 days, or 60 days if you've paid off more than 60% of the loan.
Installment contracts:
- Sellers must give key disclosures of the cash price, down payment, and any finance charges.
- After default, a creditor may repossess without a court order only if it does not breach the peace. If they sell the item, the sale must be commercially reasonable, with advance notice and an explanation of the remaining balance once the sale is complete. You can redeem by paying what’s owed plus costs before the sale.
- Most retail installment contracts include the FTC Holder Rule language, which lets you raise the seller’s misconduct against the finance company. So if your goods are defective, you can raise that as a defense against the finance company that is handling the loan.
If the sale happened at your home or a temporary location, you likely have a 3-day right to cancel.
Your options
- Before court:
- Rent-to-own: Use your reinstatement window or return the item to stop future payments; check your contract’s disclosures for costs to own.
- Installment: Ask for a hardship plan; if you’re behind, consider redeeming before the property is sold.
- If you’re sued: Don’t ignore it. Learn how to respond, assert defenses (including Holder Rule claims for bad goods), and explore settlement.
- After judgment: Understand wage deductions/garnishment and asset exemptions; some people are collection-proof.
Learn more
- Illinois Legal Aid Online (ILAO):
- File a complaint with the Illinois Attorney General's office