Appliances purchased on credit are, in fact, treated the same in both chapters of bankruptcy. The seller of goods on credit gets a security interest in the purchases according to the terms of the transaction. A debtor has a choice as to secured debt: Surrender, redeem, or reaffirm.
When the debtor elects to redeem the collateral, he pays in a single payment what the goods are worth today. Often, that is far less than is owed on the debt.
Alternatively, the debtor can reaffirm, agreeing to waive the discharge as to this debt and continue to pay according to contract terms.
In my experience, most sellers of appliances and electronics don't actually enforce their rights in collateral after the bankruptcy is over when the debtor has neither redeemed or reaffirmed. The expense associated with enforcing the lien on used household goods is simply too large relative to the value of the "stuff".
By the way, most Chapter 7 cases are no asset cases where nothing of the debtor's is sold,because exemptions protect typical possessions. The debtor keeps their goods to enable a fresh start.
-- Cathleen Cooper Moran
