OPINION AND ORDER
MacMAHON, District Judge.
Plaintiff First Bank & Trust Co. of Ithaca, New York, a creditor of defendant debtor Joan B. Hart, appeals from an order of Bankruptcy Judge Justin J. Mahoney that, pursuant to Section 722 of the Bankruptcy Reform Act of 1978 (the "Act"), 11 U.S.C. § 722, defendant be allowed to redeem her automobile from plaintiff by installment payments. Plaintiff contends that Section 722 permits redemption only by lump-sum payment of the full value of the collateral. For reasons given below, we hold for plaintiff and reverse Judge Mahoney's order.
On November 9, 1979, defendant Joan B. Hart filed for voluntary non-business bankruptcy under Chapter 7 of the Act, 11 U.S.C. §§ 701-766. Among her possessions was a 1976 Dodge Dart on which plaintiff— the only secured creditor—maintained a security interest in the amount of the car's purchase price, $3,314.75.
On April 11, 1980, upon petition by plaintiff, Judge Mahoney issued an order abandoning the car from defendant's estate, pursuant to 11 U.S.C. § 554, thus opening it to repossession by plaintiff. Defendant asserted her right under Section 722 to redeem the car for its then market value and petitioned Judge Mahoney for determination of value and for terms of redemption. By order of June 11, 1980, Judge Mahoney determined the car's market value to be $2,200.00 and directed that redemption payment of that amount be made in monthly installments of $100.00, plus 7% annual interest. It is Judge Mahoney's decision to allow payment by installment that plaintiff now challenges.
Section 722 states that "an individual debtor may . . . redeem tangible personal property intended primarily for personal . . . use, from a lien securing a dischargeable consumer debt, if such property . . . has been abandoned under [S]ection 554. . . ." 11 U.S.C. § 722. Although the section makes clear that the amount of the redemption payment is the "allowed secured claim," that is, the then market value of the collateral, it leaves unspecified the proper manner of payment. The legislative history is not particularly helpful either; both the Senate and House reports on Section 722 speak of "pay[ment]," H.R.Rep.No. 95-595, 95th Cong., 1st Sess. 381 (1977), reprinted in  U.S.Code Cong. & Ad. News 5787, 5963, 6337; S.Rep.No. 95-989, 95th Cong., 2d Sess. 95 (1978), reprinted in  U.S.Code Cong. & Ad.News 5881, but specify no particular manner in which it must be made. However, what other clues exist indicate congressional expectation of redemption payment by lump sum only.
To begin with, Section 722 was drawn from the redemption provision of Uniform Commercial Code Section 9-506. See General Motors Acceptance Corp. v. Miller (In re Miller), 4 B.R. 305 (1980). Section 9-506 entities a property owner to redeem property from a creditor by payment of the full outstanding debt for which the property stands as collateral, 8 U.C.C. § 9-506; the official comment to Section 9-506 makes clear that payment of that amount must be made in lump sum and not in installments.
Second, the basic purpose of Congress in enacting Section 722—that of devising an alternative to needless repossession of consumer goods—had as its effectuating statutory instruments not only redemption under Section 722 but also allowance under Section 524 of reaffirmation by the parties of some or all of the debtor's otherwise dischargeable debt. See General Motors Acceptance Corp. v. Miller (In re Miller), supra, 6 B.C.D. at 437. Subject to court approval, Section 524(c)(4)(B)(ii) effectively allows the parties to reaffirm that portion of a secured debt that has become dischargeable due to depreciation of collateral;
Even more persuasive is the practical consideration that, were installment payments allowed under Section 722, Congress' careful preservation of the rights of secured creditors in other sections of the Act would effectively be undermined. In Section 506 of the Act, Congress set the "allowed . . . secured claim" of a secured creditor at the value at disposition of his collateral, up to the amount of the outstanding debt, 11 U.S.C. § 506(a); by enacting Sections 725, which requires disposition of collateral for benefit of secured creditors prior to general distribution, 11 U.S.C. § 725, and 554, which allows early abandonment from the estate of rapidly depreciating collateral upon petition by the interested secured creditor, 11 U.S.C. § 554, Congress clearly sought to ensure the secured creditor the full value of his secured claim as of the date of bankruptcy filing.
However, were "redemption" allowed by payment in installments of the redemption amount—particularly in cases where rapid depreciation of collateral were expected— the value of that otherwise safeguarded claim would be impaired. For instance, in our case, should defendant six months from now find herself unable to maintain the mandated payments of $100.00 per month,
In summary, both from the source out of which Congress drew Section 722 and from other provisions it enacted inconsistent with installment redemption payments, it seems clear that Congress intended redemption under Section 722 to be by lump sum payment only.
Accordingly, we reverse that portion of Judge Mahoney's order mandating redemption by installment payments and remand for further proceedings consistent with this opinion and order. We note, however, that should he judge it appropriate, Judge Mahoney should feel free to grant defendant a reasonable time to obtain outside financing of her redemption payment. SO ORDERED.