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What do camcorders, walkman players, personal computers, stereo components, firearms, chain saws, lawn and garden tools, bicycles, and video game machines have in common?

Well, they are all the things one might find in the typical American home. Although not necessarily cheap to buy new, such items generally do not retain value over time. They frequently serve as collateral for nonpurchase money loans. In a bankruptcy context, they share another characteristic; courts have had to decide if they are household goods such that a debtor is able to avoid a nonpossessory, nonpurchase money security interest in them. Indeed, over 270 reported opinions have struggled with the issue.

What is all the fuss about? Cosmically, it is a story about nonpurchase money secured creditors fighting to keep their leverage over debtors who want to keep their camcorders, VCRs, personal computers, firearms, etc., without reaffirming their debt to the creditor. Statutorily, it is about § 522(f)(1)(B) of the Bankruptcy Code.


Originally published by Emory University School of Law's ( Bankruptcy Developments Journal in 1998.