ATLANTA -- The decision by a major furniture retailer to declare bankruptcy and shut the doors of its Georgia stores has many customers wondering if the extended warranties they purchased are worthless.

Rhodes Furniture is in the process of shutting down for good, a cause of concern for many customers who purchased big ticket items as well as extended service agreements.

Meet Shanie Scott

Shanie Scott becomes angry when she inspects her brand new leather living room furniture.

"It's obviously not going to last us very long," she said while looking at a tear on one section.

Scott and her husband spent nearly $3,000 on furniture that is literally coming apart at the seams. The couple has had it less than 60 days, and it is still under the manufacturer's warranty, she said.

Unfortunately, the company that made the leather furniture says it struck a deal with Rhodes that calls for the retailer to handle warranty issues.

The Scotts, who recently received a letter advising them to file claims under the warranty with the bankruptcy court, said they think the protection agreement is worthless.

The couple is skeptical about finding relief in the bankruptcy court and now worry about a second warranty they paid an additional $186.

"There is a third party that will be taking over extended warranty issues but I'm not at all confident that they will," Shanie Scott said.

The company that will now handle warranty claims for Rhodes is known as Assurant Solutions and is based in Atlanta.

When asked how the firm will help customers who purchased extended warranties, many of them running for up to 60 months, spokesman Jim Sykes said the company has a plan in place.

"We have a network of service repair companies," he said. "The idea is once the claim comes in we will see where the customer lives and usually we're able to identify a repair shop within 25 miles."

Customers who own furniture that can not be repair are eligible for cash reimbursements, Sykes said. However, customers who do not have their original warranty paperwork from Rhodes may be in for a tough time.

"Keep your records even if you don't have a problem right now," Sykes said. "Keep your receipt. That proof of purchase is necessary to file a claim."

He said customers should read the agreement to be certain what is covered and what is not.

Shanie Scott said she believes her furniture is covered but she has taken a wait-and-see approach. She said the extended warranty on her furniture was her first and last extended warranty.

Customers who purchased an extended warranty and want to file a claim should call 1-800-423-3830.

Customers who are offered the protection agreements should be wary. There are usually many exceptions and they can cost hundreds of dollars.

Customers who feel pressured into taking a service plan should remember that they can always walk away from the deal.