The peeling paint shouldn't be a problem as long as the body of the freezer is sound. You don't mention if it is plastic inside or metal. If plastic, scrape old paint, sand it lightly, use krylon plastic fusion paint. If metal, scrape old paint, sand lightly, use regular krylon. It says "no sanding" on the spray can, I sand anyhow for better adhesion. Whatever you do, let it cure for a day or two before plugging it in.