prohibits the discharge of debts procured by fraudulent statements other than a statement respecting the debtors financial condition everyone agrees that financial condition is a term of art used by congress and in commercial practice to refer to one's overall financial status yet respondent and the government asked this court to interpret section five twenty three and in particular congress's use of respecting to eliminate the meaning of financial condition of a term of art and essentially to substitute the word finances for it can you tell me if the car right is and the mean expecting financial situation and there are several things that could qualifies as that one would of course be a classic balance statement or sheet another would be an indication of net net wealth or overall income another net worth another would be a credit score such as those were common in one nine hundred twenty six when column congress passed a statute another would be net cash flow all of these things look to one's overall financial situation not to just one side of the ledger an asset or liability present a picture of overall financial steps and again respondents interpretation of respecting essentially eliminates that term as a term of limitation and as a term of art in substitutes the word finances fort so a statement about any individual and input any individual asset any individual suddenly becomes a statement respecting financial condition and i think there are three central problems with with common with respondents interpretation of respecting the first is as i mentioned that that their reading of respecting to mean related to eliminates congress decision to use the term of art financial condition it would be an odd thing for congress to say we're going to refer to financial condition but then essentially eliminate the meaning of that by saying respective financial condition and there's no reason why the court has to interpret respecting to mean related to it can mean related to but it can also mean about and here in context reading respecting financial condition to mean a statement about financial condition makes perfect sense to say something is about i mean it refers to the subject of the object here the object of the statement here the subject is financial condition one's overall financial status so the fact that their reading of respect to mean related to would eliminate financial condition as a term of art and interim of limitation is the first reason why this court tell me mr mr gore what do you think the difference is between relating to and about i think your honor if you go to the dictionary the dictionary definition we provide for about means on the subject of it refers to the subject the subject here is financial condition relating to is a much broader head where i switched the two words and i honestly couldn't find one where they meant something different so i'm hoping you can help me come up with those examples where you know just give me a sentence where if you have about it means which and i think you could see in that sentence that relating to is a much broader term going to capture things like oh well he struck out in the seventh inning versus well you know he hit four hundred it was an amazing season or he  almost hit the ball just he was almost just as likely to hit the ball as he was to not hit it that's a statement about batting average nobody would think that if you said tell me about your g p a and you said well gee i missed the last question on my last test that maybe that that's certainly a statement relating to your g p a that that missing that question is going to impact have some relationship to your e p a but you wouldn't think of that as a statement about your g p a and that's the way in which congress was five out of ten or a hit six had it you would be answering that question or you could say i have five out of ten when i was in a position to score actually provide looked at both sides of the equation how many hits you got and how many times it back he got so in that sense that's different than just saying we're talking about an individual asset and then i think the sort of the ambiguity in your question was did you mean his batting average in the game or a season and maybe that would be something you would follow up on but i think that your expression of that is perfectly consistent with our view is produced an irresistible example which i can't resist and therefore i suspect that the key of your example is the word the word something not the word respect and when you take tell me about what usually that means is all about but let's try it with the word statement which is in the statute make a statement about his battery have ridge make a statement respecting his batting average there with justice kagan i have a hard time seeing the difference well you know it's a statement respecting it's still going to refer to about his batting average subject of it not i think if you said tell me a statement about it tell me make a statement about spouting ever sure he made a statement respecting his batting average now used statement and now that we are he hit the ball more than he struck out versus he was that's a statement respecting about an average versus he was robbed of a hit in the seventh inning by a great catch that's not a statement respecting felting it i'll take it  under consideration and what mr howard would trouble what if the debtor makes a statement about a specific asset or liability but anybody that the reasonable listener would take that to be a statement about respecting financial situation so our view justice alito is this court should follow the congress and say that a statement about a single asset or single liability is not a statement respecti financial condition is just not if you disagree with that then i think one fallback position the court could take would be something like what you said reasonable person would view that as a statement about one's overall financial situation now this case couldn't be possibly be viewed in that way because it was clear that this was a statement about only a single asset and it was a statement in spite of his financial condition so the court couldn't possibly say words is not uncommon for someone to know that another person is in dire financial straits but nevertheless to accept collateral in exchange for property or services as a means of paying for that that's not a statement about overall financial condition it's a statement that i have and i said can be that can be used to pay a debt in this case was litigated all the way up on the premise that the statement as it issued here was a statement about his tax refund individual assets they argue below that in fact what the law firm was relying upon was its knowledge of his precarious financial condition and the bankruptcy court rejected that and and found that no it was relying on his statement about the tax refund the district court rejected that found he was relying on it was relying on that statement by the tax refund i don't even think they feel that fine into the eleventh circuit so i think that that's why this case is truly the case about a statement about a single asset a tax refund that the debtor in this case lied about and this this paradigm here the sort of classic cloud rule paradigm we're talking about a single asset couldn't be further removed from the situation that congress was addressing and i know not all members of the court may want to look to that legislative history but it's sort of the gorilla it's the elephant in the room here and that's when congress is looking to the situation in one thousand nine hundred seventy eight what it was doing is looking at a particular abusive practice by some creditors which were using written financial statements essentially to dupe applicants for credit into making false statements by simply admitting debts or assets on those statements and then using that as coersion when say went into bankruptcy and so can congress pacific rule that dealt with written financial statements and figure i'm not sure i understand how that helps to even on its own terms assuming i'm i'd be willing to look at it of course but if congress is concerned is that  creditors are soliciting information that's incomplete about debts liabilities that's just half of the balance sheet that you want us to look at so congress appears to have been concerned t extent we can tell these things about misstatements only with respect to one half of overall financial condition right well i don't think that's completely correct your honor in the sense that how that the legislative record omitted liabilities right congress the creditors in that situation were using forms that represented one's overall financial status referring to a credit score net worth but does not show that  omitted liability one asset or lack one debt can reflect on the overall financial condition that can be about and relevant to and reflect on the overall financial condition it certainly can be related to but the question is what kinds of statements what will congress already thought it could be about didn't it i don't i don't think it did i mean it said it could be related to but the situation there is you have creditors who are abusing a false financial statement that included liabilities and assets deserters debtors who are essentially blameless and here the situation is the opposite there's no reason in judging bill recognize this and the tenth circuit decision and also there's no reason for debtor to be misled or mistaken on be about your overall financial condition its i own a genuine for me here i think i mean i get two answers one of my first answer is if it's a statement about a single asset it's just not a statement about overall  that you look to whether a reasonable person in context would view the statement as being about one's overall financial situation as in context those know it would be the bank says schmidt you are broke are you and that would be a hypothetical that i think would call into play this this separate rule if the court wanted to go there now you could say that about the statement in this case no reasonable person would look in the context here and say that the statement that i have one hundred thousand dollars why isn't it exactly like vermeer almost in my possession right isn't that what why why isn't everyone in the room understanding exactly what that means which is ok i don't have a lot else but i've got this i think i think it's the difference between financial condition and ability as the billeted to meet your current debts they come to that that's not the way congress thought of it if you look at the definition of insolvency it refers to financial condition first and the difference between assets and liabilities congress also differentiated between assets and liabilities and financial conditions other provisions were listed those terms separately in eleven u s c eleven zero three c two eleven zero six three and there's two different two additional reasons why i don't think you could read respect in the broad related to way that respondents in the government ask you to hear the second the first one is that it strips financial condition in the second one is that congress used the term related to a nearby provisions of the statu the government's role their wall would render the baseline rule and section five to three that desperate cured by fraud are not dischargeable in a political to a common fact pattern under section five two three which is statements made about one's finances to secure credit and the government itself on page eighteen of its brief recognizes that that is a common situation someone making statements about one's finances to to obtain credit and yet the consequence of respondents and the government's rule is to wipe that out as a basis for destruction and there's no indication at all that congress in mind that congress had in mind such a dramatic reshift of the ordinary regime that has applied for a century in this context which is a debt procured by fraud is not just chargeable and this court relied upon similar considerations for example and m vs spears were refused to interpret an exception to the driver privacy protection act in such a broad manner that it would really strike at the heart of the over line objective there and here we have a  grounded objective is that this court has recognized repeatedly of not releasing for debtors debts procured by fraud and i think one would look skeptically to a rule that would wipe out the application of that rule and it commonly recurring contacts which is statements made about finances hand may not as you to clarify something and i may now have understood this correctly but if statement don't worry i am above water yeah i think that would need to be in writing it would and i think that the the fairest way to read that would be a statement about financial condition and that's quite different than a statement about individual assets that fact pattern is not coming up in the real world pay them right because that's that goes to ability to pay not overall financial condition and again it goes to why we asked for collateral and loans commonly collateral not an i'm sorry it's a human you it's not uncommon for people to have been in dire financial straits but you go to get loans on the basis of collateral that's sort of the payday situation that the government refers to ability to pay is a different concept than financial condition congress would have known that at the time an inactive financial condition language initially there were state laws that referred to financial condition or ability to pay more about your financial commit condition carr above water that's one option or i have a bank account with a billion dollars in it well i think that i'm above water tells you about your financial condition the because it tells you about your overall financial status the i have a bank account the billion dollars in it tells you have a lot of money doesn't tell you anything about your debts really rich people sometimes have really big like the ladies as bertie made off and so that does not give you a sense of overall financial status now again i think that calls into play as leaders point that if you disagreed with that then maybe that is the kind of statement that one could look at and say that that is so astronomically big a reasonable person would view that as a statement about overall concerning about overall financial operator to follow the text of a con said and again it's accepted by everyone that financial condition is a term that refers to overall financial status that's the easiest way to interpret the statute it's the way that brings in line with the problem that congress ought to address and again i'm just referring returning to that problem briefly there you had a situation of a certain class of creditors that were abusing written financial statements that included assets and discharge those that's a must say meet certain additional requirements and be this court recognized that and feel versus ma'am which makes it a little bit different than the typical legislative history case the government strangles the argue that the court should interpret five to three a two a field in light of that specific problem that was seeking to address and that problem couldn't be further removed from the situation here where you have a creditor that is entirely blameless and you have a debtor which had no reason to be misled or mistaken about a single individual asset which is a point the judge made in the jolson case so in this case there's no city no reason to think that congress would want to balance the scales and he differently and instead there's every that not only did the debtor lie about his tax refund i think that the respondent here is trying to rehabilitate the debtor a little bit but just to be clear there were findings made that he lied about the amount of the tax on and whether or not th actually received the tax fun those times the bankruptcy court found that the deceit was obvious that's at page sixty of the petition appendix so why would of congress have intended to for a debtor engage in obvious deceitful conduct against a creditor who is entirely pointless to allow the debtor to discharge debt and think about the consequences of the kind of behavior that that would promote there's no reason to think that congress would reason that the the eleventh circuit gave and that is advanced by the respondent here not so much so by the government and i think that that's sort of an example of the worst kind of legislative purpose in the sense that there's there's certainly no general statement of purpose that congress intended things to be in writing generally if congress really had that objective justice ginsburg it wouldn't have limited the writing requirements to statements about financial condition it would have applied it generally under their rule they say that statements about professional qualifications were the values of assets are are different but if congress is really concerned about having riding on things in writing for evidentiary purposes it would apply that across the board so i don't think there's any real attraction to the notion that the statute should be interpreted in light of this on stated objective to simply generate more reliable evidence and proceedings nor is there any indication that courts have had difficulty making credibility determinations about lies in this context those were carefully laid gaited here both courts below her testimony and they concluded that the respond in this case lied about the status of his tax refund and the amount of his tax refund given that this case falls within the baseline rule that that is not just chargeable the only way that respondents and the government can pull that out of there is to give respect in the broad us conceivable bruff in terms of relating to and then once you get to that point to ask this court essentially to impose judicial limits on the breath of that term because even they i think appreciate that if respecting really means related to here then this is really going to swallow up the whole thing when they say that the statement has to be about an asset the respondent does but why isn't a statement that i run a hedge fund a statement relating to on financial condition certainly someone might would reasonably deal with that way why isn't the statement that i graduated first my class from over business school statement respecting financial condition certainly would be related to that and they're just asking this court to draw arbitrary limits in order to cabin the reach of their rule the government takes a slightly different approach and asked this court to ask this court to adopt it and ability to pay overview but that's not in the statute of either  as i've explained ability to pay something by committing an asset to pay a debt is different than one's overall financial status you can be deeply in debt but still haven't answered you commit to paying a debt if i could reserve the remainder of my time thank reduced thank you mr chief justice and may it please the court petitioners principle textural argument is to say and sort of looking to relating to they prefer the word about now we reject the premise that there is any substantial legal difference between those two concepts but even supposing there is a difference the only example that the petitioner can offer that shows any difference is what we would call a trivial example something that's a trivial impact on  object but in the context of this statute section five twenty three age to those sorts of trivial examples structurally cannot exist and that's because in addition to demonstrate what a plaintiff comes forward with this sort of claim in addition to identifying the statement that the plaintiff alleges is fraudulent the plaintiff must also identify why that statement was immaterial to its decision making why the plaintiff actually relied on that statement and why the  at minimum was justified in doing and so those requirements those necessary requirements of a section five twenty three eight to claim necessarily and substantially limit the universe of claims that could be within the realm of statements respecting financial condition and congress was well aware that it was crafting a statute about fraud it well knew of all of these other limitations that cabin the universe of the potential kinds of claims and so that precludes any court from having to consider these sorts of trivial example let's let's take mr gore's example the harvard business school graduate i graduate from harvard business school and some of my reasonably rely on that and take it to be material and significant but doesn't relate to financial condition overall financial condition doesn't that term have to mean something so a few things about that you're on first to directly answer your question we think that the clearest test is to ask does the statement describe what would be a line item on one's balance sheet or income statement we think that's a very easy way to understand what had wrecked our arses so you'd rule it out on the basis that has to be at least something it would appear in a financial statement or a lot of trivial things appear in financial statements right i have this or that little asset i own a car second hand car it's not worth a whole lot but appear on a financial statement that would be enough in your under your rule well yes your honor and what what deal with that example is the materiality requirement but again there will is if you make that all now know it was reasonably relied on for the purpose of the loan or the services rendered or whatever as collateral surely of course it was but it doesn't have anything to do with overall financial condition just means i own a very bad car well the question would be the reliance area there your honor and if they're relying on it that statement because it says something about your financial condition i think i would be very clear evidence that goes to financial condition but again their test sets up a rule where if it appears on your balance sheet they agree to be  applies in that circumstance the only question here is if you make that i demichelis statement not in the context of the balance sheet but standing alone does all of a sudden to a apply and we think that rule doesn't make any sense because it's the identical misstatement if you include misstatement about a worthless car on your balance sheet and you make that identical statement standing alone because the loan officer comes ask you the next day by the way do you have any additional automobiles we should we should know about the rule they set up is if you put it on the balance sheet to be applies but if you say it standing alone all of a sudden to a applies that's all form and no substance the rule the different the distinction between two way and to be should not turn on what the packaging of the misstatement is if it occurs on a balance sheet occurs independently standing alone it should look to what the cause of what the actual substance of the statement is and when the substance of the statement is one that goes to financial status then it's a to b claim because a statement this respecting financial condition and again it's clear that that is this case one need look no further than their amended complaint in the bankruptcy court this is that the eleventh circuit's a pentax page eight thirty eight and they say what why was the tax information material and they say quote it was material information regarding his and his company's financial status and abilities their theory of materiality and reliance was that this statement was material in there relied upon it because it went to his financial status his ability to pay that's the identical reliance theory that the bankruptcy  court adopted at petition appendix sixty two way and so what our position is is that a creditor should not be able to on the one hand identify for purposes of stablish in reliance and materiality that the reason the actual reason they relied on this was because it was a statement about financial condition while at the same time in treatment in trying to avoid the requirements of to be say no no this was something that it was not respecting financial condition because it didn't have the proper form of being on a full balance sheet the reality when a creditor relies or this actual reason that is what should govern the two way to be analysis or else again you lead to these bizarre results as they said it shouldn't matter the truthful packaging again is  the substantial amount remains under two ways thirty four years of four circuit practice of shown and that's because most of the claims most plaintiffs under section five twenty three eighty two are not lenders most plaintiffs have a variety of fraud claims that are cruz which was a case about a fraudulent schemes over charge grants in violation of state law that was a two way case prior to that and grogan was securities fraud that was a two way case all of these cases the deal with fraud entirely outside the lending capacity come up is to a cases and as we've said for thirty four years our approach has governed in the fourth circuit and two way is very much alive and well there we documented dozens of examples of all sorts of frauds for example when somebody misrepresents the quality of service or the goods that they're selling in a whole panoply of issues that have been addressed as to a cases in the fourth circuit which is applied angler for the past in saying that are you saying that to him he does not really exist anymore with respect to fraud on lenders no it still can exist for fraud with lenders particularly when somebody is making a statement at the time of obtaining that as to a future promise and they're the fraudulent claim would not be what about their financial condition but something that they are going to do in the future perhaps how they use the proceeds of a low when or if they're going to convey ownership interests of the person who's giving them the loan so there still is a role for it to weigh in the context of lending but the context of the statu congress was quite clear in creating to be where it intended to have to be apply in the main in the lending capacity that was because congress recognized that there was a pattern and practice of abuses in the particular consumer lending space and that's why congress felt the need to impose heightened consumer protections in the to be context and we think it would be a bizarre result if those protections could be circumvented by a rule such that if the lender asks for everything but overall financial condition if they just ask for the three most important assets if you were in debts all of us in those protections would cease to apply even though the creditor is getting the identical information that they want from getting a holistic balance sheet so that the context of the we think very clearly indicates why congress would prefer for an approach that applies to statements about single assets every bit as much as the statement about an overall balance sheet in addition to  to that particular purpose the very example that congress gave and in acting the statute was a list of debts only something on the debtors balance sheet and congress had cited to a bankruptcy court decision  where bankruptcy judge bear very clearly explained that the kind of example that congress had in mind was not the kind of document from which overall net worth could be obtained so the very example that congress  identified for purposes of to be would not be captured by petitioners rule which i think would be a surprising result beyond that we know that congress had in mind that to be would have a real effect and that's because the one nine hundred seventy bankruptcy commission when it issued its report in one thousand nine hundred eighty three it recommended doing away with this exemption to bankruptcy in its entirety it found that on the whole it was doing more harm than good to the public now congress said we're not going to go that far we're going to strike a compromise in lenders will be able to exempt debts from discharge in these circumstances the whole read the bankruptcy commission report it was it was entered into into the record your honor it was entered into the record and i'm sure they'll read it  clear our principle argument rests on the text of the statute and we think that that resolves this case we don't cement that going to these other sources are necessary we think the text is clear but to the extent that there's any possible ambiguity we don't believe there is any but we think all of these other points lined up behind it because along the same line prior to the one nine hundred seventy eight re codification five circuits it looked at materially identical language and they all reached the same result again we think the text is the most compelling  basis for the court to decide this case but the fact that the text the legislative history the statutory lineage in the clear purpose all line up the same direction we think indicates why the eleventh circuit was was absolutely correct in its decision with this case may i go back to the argument mr kerik or care did he said the congress was seeking to stick to protect debtors where credit companies were telling them admit a particular item how does this rule protect those creditors because if the debtor provides the balance sheet in writing but omit something that the creditor asked told them it's not it's not important and why does the writing requirement say that that or it doesn't really your honor that's it doesn't say the debtor because you are in to be there were two particular protections one was the writing requirement and you're correct the writing requirement would not apply but the other distinction between two way which does the work in that case is the reasonable reliance requirement congress enhanced the standards from justifiable reliance which typically does not require any  affirmative duty to investigate to reasonable reliance which would include a duty to investigate particularly for that example because they said creditors because they get consumer reports and other kinds of information from credit rating agencies they can either know or and we pretty easily find out if that if that statement is incomplete and so the reasonable reliance requirement is what takes care of those cases would you respond to to mr garcia argument that the statement here concerns ability to pay  financial condition well i guess hard for me to see the distinction between those two are because i think people are concerned about ability to pay statements because they go to financial condition vice versa financial conditions statements are relevant to  again if the government says ability to pay is a very important part of this test we have two separate amicus briefs who identify a separate way to look at financial condition which is not just balance sheet solvent see but is a quibble solvency which goes to ability to pay so i think another way to look at this case is a statement that shows ability to pay liquidity is a statement that goes to financial condition i think it's very hard to disaggregate those two and this is obviously a statement about ability to pay and so i think that does confirm that it is a statement spect in financial condition now  i think the one distinction that they try to make it page fourteen of the yellow brief is that there was a model code back in one thousand nine hundred six that looked to statements respecting financial condition and then means of ability to pay and they tried to suggest that since  state respecting financial condition was plucked from that model code that means of ability to pay something different that means of ability to pay that language in the context of that model code was doing something very different it was applying to what we today think of payment from insiders so for example if you show up at the jewelry store and you say well i don't have the ability to pay i'm not going to make a representation about my financial condition but my very wealthy grandmother is going to come tomorrow and pay for this diamond that is a representation about your means of your ability to pay which is distinct from your financial condition so the distinction that they try to make in the yellow brief of page fourteen is about those third party ability that means to pay when you take those third parties out i don't think there's much distinction between financial condition and the ability to pay when men beyond human think you need be putting question your honor this rule has applied for thirty four years in the fourth circuit and neither petitioner nor it's a miki have come up with a shred of evidence that there has been any untoward policy effect on small business or any other sector of the economy and i think we know exactly why because  be amicus brief cites its own report in its report at page eight concludes the bankruptcies are not significant problems for small business that goes through all of the other problems that small businesses have in obtaining payment and it says bankruptcies are relatively insignificant and th same report at page six explains why beyond that that small businesses stand to benefit more from expansive rules that protect debtors for the very reason that small business owners are more likely to be debtors in bankruptcy cases than the general population so the n f i b zone evidence suggests that that bankruptcy is like this do not pose any practical problem on small businesses beyond that that these sorts of rules help small business owners who are more likely to declare bankruptcy and there's just simply no evidence even though we know our rules govern for thirty four years in the carolinas virginia and maryland and there's been no indication of any sort of overreach of record keeping well you know we we get these arguments a lot this rule has been there for thirty years who are no problems i mean there are a lot of factors go into whether or not you're there's no empirical evidence it's not if there's a daily report about what charges have been made in that cases have been settled or anything like that the fact that there haven't been that many reported decisions which i assume is the basis for your statement has been a problem it doesn't really tell you all that much in cases like this but i think your honor the point that we make is a is a more limited one which is to say if the sky were falling in the fourth circuit there would be some evidence or some outcry from these very substantial jurisdictions there would be some indication that there was a problem that that came from this rule so we're using the absence of evidence in the fourth circuit to simply say that any view of a policy concern is substantially overblown because there hasn't been any identification of even a single case where there have been imposition of record keeping obligations of different improper or any sort of improper cost on small businesses and again i think when we look to the n f i b evidence that shows exactly why this is just not a problem that in the aggregate was of concern to small businesses and rather congress was looking at this as consumer protection how it dealt with consumer lending in the aggregate and that's why it drafted the broad statute that it did to preclude any kinds of circumvention because again a rule to the contrary would lead to a result where if you appling had not just said i'm getting one hundred thousand dollars refund but i'm getting a hundred thousand refund and therefore my head is above water that all of a sudden to be would apply that's just all form over substance and there's no reason to think that the congress would actually done that so we think our rule accords with what actual creditor behavior is and that should be the rule of decision that congress was concerned about substances additionally  said our rule captures the only single example that congress gave and finally i think our rules as plainly required by the the clear text of the statute that the word respecting has a broadening function there's been no indication that has anything but a broadening function and regardless of one things it's relating to respecting about all of that broadening function leads to the very same rule that the eleventh circuit adopted below where statements about assets and liabilities not to me you think why you think you're better than the so general situation while our rules is superior for several reasons a complex as congress has goal of extending better protection to this range of claims because but for our rule so how is your different from the solicitor sorry sorry  has a direct impact on one's overall financial condition which petitioner defines as the balance of assets and liabilities is a statement respecting financial condition so we think an easy way to think of this is if it's a statement describing a single line item on a balance sheet or an income statement that's what qualifies the government's rule is that they say it's quote an affirmative representation about a single asset if that representation is offered as evidence of the debtors ability to pay so they add that if evidence of debtors ability to pay we think that's just descriptive of what's going to happen  these cases rather than something that has to be added as a test that they offer this example of items in commerce we think our rule would come out the same way with items in commerce just when one thinks about the timing of the transaction because when that transaction closes the representation one relying upon that the good is genuine isn't about something on one's balance sheet it's about an item that's actually being transmitted in commerce and coming off one's balance sheet so at that time of our alliance it's not a balance sheet style statement so i don't think there's any practical difference between where stamberg mr chief justice and may it please the court our view and respondents view of the statute leaves the no discharge rule in fraud cases basically intact we're just interpreting the scope of the statutes provision that says that statements need to be in writing and as the colloquy with response counsel makes clear although some statements might indeed be in significant the dollar bill in my pocket or by analogy a single at bat of ted williams  statue is only concerned with representations that have actual effect on credit or behavior and the determination whether a statement is one respecting financial condition or not will make a practical difference only when the creditor has actually relied on it and the reliance was at a minimum at least a creditor has relied on the statement about the value of a single asset such as here a tax refund has done so for exactly the same purpose that one would customarily rely on a comprehensive financial statement for which is to form a judgment about the debtors credit worthiness for purposes of or not consummating a particular transaction so seamen respecting financial condition is ultimately about the topic of the statement it's not about the significance of the statement so if i make a statement about the status of the project being finance say i lied to the lender and say that we've broken around we're moving on to phase two when in fact there's not even a shovel that's hit the dirt yet that's not a statement respecting financial condition that's a statement respecting something else i think it's also worth bearing in mind that this phrase wasn't plucked out of the ether in one thousand nine hundred eighty eight it existed in prior bankruptcy law dating back to one nine hundred twenty six and it had been interpreted by courts over the years to extend beyond statements about overall financial condition to include statements about particular assets under circumstances where a creditor had relied on that statement and been defrauded it's also worth bearing in mind that the the focus of the legist process in one nine hundred seventy s was the commission's report one of the two bills that was before congress in the seventy's was drafted by the commission the commission included four legislators of the nine members and the hearings were all about what had happened before the commission what the commission was proposing and it's striking that the commission had proposed to eliminate the fraud exception to discharge entirely for consumer debts not just for false financial statements for all for all consumer debts and congress thought that that went too far but ultimately preserved a rule that for the particular class of statements that deal with financial condition the representation would need to be in writing if the creditor sought to render that claimant just non dischargeable in bankruptcy you say intent of the person making the statement the subject good and the person may know we see it as an objective test that turns on the context in which the statement is made so if a creditor hearing that statement in the context in which the statement was made and remember we're talking here about oral statements because it only makes a difference for oral statements really so if the creditor says tell me about your financial condition and the debtor says here are the three significant assets i own that you should know about one of them is a genuine vermeer for a reasonable creditor would take it that way i think a reasonable creditor gets closest to the right approach it's an objective tested in other areas of the law this court has looked to into starting the purpose of a statement as applied an objective test as for example whether an out of court statement is testimonial or not and we think that it's important to be objective just so that a creditor doesn't come into court when it files its complaint in the adversary proceeding and say i didn't subjectively rely on it for ability to pay i relied on something missed mr he you said that there was really no practical difference between your test with the evidence of ability to pay language in it and his test without it do you disagree with that or agree with that as i understand respondents position there is no practical difference in how it turns out we're really the point of our ability to pay languages is to get what we think congress was trying to do here and then one can agree or disagree as a general matter with its policy choice but what we think congress is trying to do w ability to pay differently than than other types of statement respecting financial condition is is one made for the purpose of shedding light on one's financial condition and why ever would a creditor care about that because they want to know if they're going to get their money back  what if it's a false statement about an asset but it isn't one that would be taken by a reasonable creditor as having any significant bearing on financial condition well i  think that that statement probably would not be material or it would not be one that the creditor would have reasonably relied upon by hypothesis we're talking about circumstances in which a creditor has come into court and said i was due for audit this statement that was made was so significant that i made a different lending decision than i would have but then they turn when it comes to the analysis of statement respecting financial condition they say oh no this statement wasn't significant enough to go to the debtors overall financial condition it's it just merely affected my decision about whether to consummate the deal and i think that what congress was focused on  hundred seventy s for better or worse was to affect real world creditor behavior and who why do we have to look at the dangers tent why don't we just the elements of reasonable reliance capture almost how can how can a creditor reasonably rely on a statement that wasn't there couldn't have been intended as i think that's right i don't think we are looking to the doubters and intent under our approach i think we're looking at what an objective observer coming at things from the creditor side of the transaction would understand the statement to have been made for was it to shed light on the debtors ability to pay or not we've been focusing on the balance sheet and that's where your focus has been is it an asset would appear in a financial statement but what about income statement were representation about a future stream of income that wouldn't appear on the balance statement but might appear income statement i understood there would be a little daylight between your position and your colleagues on that and i think our approach would cover those statements because we think that they are financial representation representations that go to ability to pay i'm not sure whether respondents council would say that their approach doesn't suite that and i think they also have referred to income or debt statements in addition to balance sheets and in that sense where the government's approach isn't tethered to any the formality of the particular document or what appear any particular document is really about the purpose to which we'll be talking about assets or liabilities that doesn't necessarily represent income future income streams but that's right the articulation of the government's test that my colleague read sort of baked into it the premise of this case which was it's a statement about a single asset and so i don't know that this court would need to think about the entire universe of representation in order to resolve it but it's certainly a statement that is not just about an asset or a liability but it is about an income and expenditure would also fall within our approach so and as to why the congress may have required statements to be in writing it's true that it could have said much more in the legislative history than it did but  we know one thing for a fact from the face of the statute and everyone agrees about it congress did require statements to be in writing of the respecting financial condition in order for the creditor to prevail congress could have written into a statement in writing respecting financial condition but it didn't it's a statement respecting financial condition and then in to be imposed a writing requirement and we think the only way to give it we don't see how under petitioners approach it would be sensible to distinguish between statements that go to the hole  statements that go to some or most or or one  i'd be happy to entertain any further questions at the court may have thank you counsel five minutes mr garner thank you mr chief justice the rule vance by respondent and the government would essentially wipe out the application of five t three baseline rule in the consumer finance or simple collateral situation the government says itself on page eighteen of its brief that statements respect and debtors finances are of course common in credit transactions and under the rule that you've just heard today and the false statements about finances are going to result in a debt that's not just chargeable if they're made orally which as the national federation of independent businesses has told this court statements about finances are still made orally and common transactions throughout the united states by small businesses and regular folks and there's just absolutely no indication that congress intended to put creditors who are blameless in a situation where the debts created by to see full debtors are going to be entirely discharged under this rule the fourth circuit case law only proves that the fourth circuit has invented artificial limits on respondents related to principle what what that case law doesn't show is all the debts about false statements about individual assets that are being discharged in the fourth circuit and putting creditors and hardship situation that congress did not intend the discharge so i don't think the fourth circuit case law really gets them anywhere that the problem in this case is completely different than the problem that congress had in mind we're talking about debtors and creditors make a false statement about a single asset and the classic kind of collateral situation where there is no reason to think that the creditor is blameworth any way and where the the debtor is entirely deceitful and that situation there's no evidence either in the text or the history that congress intended to waive the balance in favor of debtors there in excuse debtors by discharging debts procured by fraud the ability to pay concept is just different than financial condition collateral on a thousand dollar loan you may be able to use that collateral to pay the loan but that has no bearing on your overall financial situation lots of people who are in dire fence financial situations make statements about collateral in order to make loans and a lender might look at the statement about a pleat piece of property as evidence of an ability to pay but that is not evidence of one overall financial condition and one thing ironically that i didn't hear from either respondent were the government today is any real argument based on the text of the statute either respect in which they've relied upon up to this point or financial condition or to hear them dispute that financial condition does refer to one's overall financial status and i didn't hear any explanation as to how they're related to an interpretation of respect and doesn't negate that term as a term of art and term of limitation the last thing i would say is if this court does adopt a new test in this area and there have been competing versions of possibilities for this court we are urges court to vacate the decision below and to remand for one thing there's there's a dispute among the parties about exactly why respondent made a false statement about the tax refund whether lamar was relying on its overall financial status the courts below heard that and rejected respondents position that he advance today in  to look at pages sixty to sixty one of the petition appendix and thirty nine and forty the petition panix where the courts below held that we relied on the statement about his tax refund and not his overall financial condition and because we relied on a statement about single asset and not a statement about his overall financial condition and because that statement was indisputably false the debt at issue in this case should not be to charge under the command of congress the no further questions thank you counsel