Debtors filing for bankruptcy often wonder whether they should keep making payments on furniture they are financing. Prior to filing for bankruptcy, many people purchase household goods and items, such as furniture, television, and electronics on credit. Generally, the agreement is that the store will allow them to purchase the household good, so long as they continue to pay through an installment agreement, whereby they make monthly payments until the purchase price is paid in full. The amount still owed on the loan at the time the debtor files for bankruptcy is also considered a debt. The debt is a secured debt, because the household good was purchased on credit and the store has a security interest in the household good as collateral. If the buyer fails to make payments, the store has the legal right to repossess the furniture.
