IN RE MILLER

OPINION

GEORGE BRODY, Bankruptcy Judge.

This proceeding involves the question of whether a debtor may redeem property under section 722 of the Bankruptcy Reform Act of 1978 (hereinafter referred to as the "Bankruptcy Code"), by compelling the secured creditor to accept payment in installments.

Raymond Robert Miller (hereinafter referred to as the "debtor") filed a voluntary Chapter 7 petition in bankruptcy on December 12, 1979. In his schedules he claimed as exempt, a 1979 Chevrolet which is subject to a security interest held by General Motors Acceptance Corporation (hereinafter referred to as "G.M.A.C."), on a total outstanding indebtedness of $5,680.00. G.M.A.C. filed a complaint to reclaim the automobile. In response, the debtor has offered to redeem the automobile, pursuant to section 722 of the Bankruptcy Code, by paying G.M.A.C. $4,050.00, the fair market value of the automobile, plus the prevailing rate of interest, in thirty (30) monthly installments. G.M.A.C. acknowledges that the Bankruptcy Code permits the debtor to redeem the automobile, but contends that unless it agrees to accept installment payments pursuant to section 524(c), the debtor must pay the $4,050.00 in cash.

Under pre-Bankruptcy Code law, a creditor with a valid security interest could repossess the collateral, regardless of its value, if the bankrupt did not pay the total outstanding indebtedness. Long v. Bullard, 117 U.S. 617, 6 S.Ct. 917, 29 L.Ed. 1004 (1886). The secured creditor, therefore, was able to use the threat of repossession to induce the debtor to reaffirm the entire debt.1 Section 722, in conjunction with section 524(c)(4)(B)(ii), attempts to eliminate this threat.2 Section 722 allows an individual debtor to

Since the parties agree that the automobile is property that may be redeemed pursuant to section 722 and that the amount of the allowed secured claim is $4,050.00,3 the only question that remains to be decided is whether this sum must be paid in cash or whether the secured creditor may be compelled to accept payment in installments.

The official comment to section 9-506, the redemption provision of the Uniform Commercial Code, states that the payment that must be made, "obviously means more than a new promise to perform the existing promise; it requires payment in full of all monetary obligations then due. . . ." This comment expressly recognizes that the concept of redemption presumes payment in cash, and does not encompass a mere promise to make the required payment in installments.4 There is nothing in section 722, nor in the legislative history, which indicates that Congress intended the secured creditor's claim to be satisfied other than by a cash payment.5

Whether a debtor may redeem by paying "the amount of the allowed secured claim" in installments without the creditor's consent, need not, however, be decided solely by reference to section 722. Section 524(c) permits a debtor to enter into an agreement with a creditor to reaffirm certain debts.6 The method and time and amount of the payment or payments are negotiable by the parties, but the agreement is subject to approval by the court. In most instances, these agreements will provide for installment payments since the debtor, unless the reaffirmed debt is negligible, generally will be unable to pay the required amount in cash.7 If section 722 were interpreted as permitting the required payment to be made in cash or installments, section 524(c)(4)(B)(ii), which allows the debtor and secured creditor to enter into a reaffirmation agreement "providing for redemption," would be rendered meaningless. In light of section 524(c)(4)(B)(ii), the conclusion is inescapable that in order to redeem pursuant to section 722, the debtor must pay the allowed amount of the secured claim in cash, unless the creditor, pursuant to section 524(c), agrees to accept payment in installments.

The debtor, however, contends that section 1325(a)(5) of Chapter 13 of the Bankruptcy Code is authority for construing section 722 as permitting installment payments.8 Section 1325(a)(5) allows the court to confirm a plan involving a secured creditor, even though the secured creditor has not accepted the plan, if the plan provides that he retains the lien securing his claim and if the value of the property to be distributed to him under the plan, as of the effective date of the plan, is not less than the allowed amount of his claim as determined under section 506(a).9 However, an analysis of the structure of the Bankruptcy Code clearly establishes that this provision has no applicability in a Chapter 7 case.

The substantive provisions of the Bankruptcy Code appear in Title 11 of the United States Code and are divided into eight (8) odd numbered chapters [chapters 1, 3, 5, 7, 9, 11, 13 and 15].10 Chapter 1 — General Provisions; Chapter 3 — Case Administration, and Chapter 5 — Creditors, the Debtor, and the Estate, apply generally to all cases under chapters 7, 9, 11 and 13. Chapter 15 — United States Trustees, applies only in chapters 7, 11 and 13 cases in certain designated judicial districts in which the United States trustee "pilot program" is in effect. The remaining chapters deal with the types of cases which may be brought under the Bankruptcy Code, viz., Chapter 7 — Liquidation; Chapter 9 — Adjustment of Debts of a Municipality; Chapter 11 — Reorganization, and Chapter 13 — Adjustment of Debts of an Individual with Regular Income. Each of these chapters is designed to deal only with the special problems which arise in the type of case it embraces, and the provisions contained in each of these chapters apply only to the cases filed under the particular chapter involved. § 103. Since section 1325(a)(5) is only applicable in a case filed under Chapter 13, it, therefore, cannot be considered in interpreting a provision applicable only in a Chapter 7 case. § 103(h). A debtor who desires to retain property and pay for it by deferred payments as permitted by section 1325(a)(5), need only file an original Chapter 13 petition or convert a pending Chapter 7 proceeding to a Chapter 13 case.

Additionally, the debtor contends that if the court holds that redemption requires payment in cash, section 722 would, for all practical purposes, have no application, since debtors will not be able to redeem property of any significant value, and it cannot be presumed that Congress intended such a result. However, Congress obviously recognized that not all debtors would be in a position to redeem under section 722; otherwise, there would be no need for section 524(c)(4)(B)(ii). Undoubtedly, many debtors will not be able to redeem property of any significant value unless the secured creditor agrees to finance the redemption through a section 524(c) reaffirmation agreement or unless the debtor can secure substitute financing.

However, the fact that debtors may not in many cases be able to exercise the option given to them by section 722, with respect to collateral of any significant value, unless the creditor agrees to accept installment payments, is no justification for a court to ignore the clear meaning of section 722 to reach what it considers to be a more equitable result. A judge is not at liberty to substitute his own social and economic predilections in contravention of an express statutory mandate.

The debtor's argument embodies a matter of policy that should be addressed to the Congress. It is not the function of a court to weigh the wisdom of legislation nor to dispense its own ideas of justice.

Finally, the debtor contends that section 362 of the Bankruptcy Code may be utilized by the court to compel a secured creditor to accept the allowed amount of the secured claim in installments. This argument also has no merit.

The filing of a bankruptcy petition operates as a stay of any act to enforce any lien against property of the debtor to the extent that such lien secures a claim that arose before the commencement of the case. § 362(a)(5).11 It is, however, a stay of limited duration. It terminates automatically when a discharge is granted or denied or when the case is closed or dismissed. § 362(c)(2).12 It is clearly not a vehicle for the debtor to compel a secured creditor to accept installment payment in lieu of the cash payment that section 722 requires. The court, however, may grant the debtor a reasonable time to obtain the necessary financing so that he may exercise the option accorded him by section 722, either by continuing the stay by virtue of section 362(d)13 prior to discharge, or by virtue of section 105(a)14 after discharge.

An appropriate order to be submitted.