Store bankruptcy complicates problem with new furniture

Q. We have had an ongoing issue for 1 1/2 years. We purchased furniture in May 2007; no payments for one year, interest deferred. First delivery: structural defect. Replacement delivery: nonmatching color issues. Last delivery: imperfections on fabric. A repair person came out in January 2008 to try and address our issues. The imperfections could not be repaired to our satisfaction. He indicated the furniture company would get back to us. The company filed for bankruptcy one week later. We tried to contact the furniture company for satisfactory resolution to no avail.

(The financing was with a retail credit company.) We offered them the opportunity to pick up the furniture. They declined, stating that they were not in that business. We gave them all the details and filed the dispute, which by their terms, exempted us from payment/advancing deferred interest. They have subsequently advanced deferred interest and expect that the total debt be paid. Can you advise or comment on how to resolve the issues?

Anonymous

A. You're dealing with something of a double-whammy. In today's environment, more and more people are having to deal with bankrupt companies. Circuit City and Linens 'n Things are among the major retailers recently filing for bankruptcy. While your rights don't completely go away when a company files for bankruptcy, it certainly complicates matters.

Your situation is complex since you have issues with two companies. The credit company is right in one sense. They have no standing or ability to take your furniture. Your issue with the furniture was between you and the now bankrupt company. If they no longer exist, you're stuck with the furniture, unless you have some manufacturer warranty to fall back on.

So, you have to make some moves quickly before your credit takes a big hit. You should get some outside parties involved so someone can mediate this and help reach a reasonable solution. File complaints with the state attorney general's office, the Better Business Bureau, and, if you believe the company has violated the terms of your financing agreement, the Federal Trade Commission. You probably want to avoid any arbitration offered through the financing company.

You're not likely to get an ideal resolution regardless of what you do, but you need an objective party to step in and help close out this situation.

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