Opinion ID: 166570
Heading Depth: 3
Heading Rank: 4

Heading: Summary of Legal Analysis

Text: 75 For the above reasons, it appears that the strict reading of respecting the debtor's . . . financial condition is correct. It is the reading most consistent with the text and structure of the Bankruptcy Code, the legislative history of § 523(a)(2)(A) and (B), and case law. To state generally that we adopt a strict interpretation is not enough to resolve this case or to provide guidance to future courts, however; we must also define precisely the scope of the phrase respecting the debtor's . . . financial condition. 76 Title 11, United States Code § 523(a)(2)(A) generally bars the discharge of the debts of an individual debtor to the extent that those debts were obtained by false pretenses, a false representation, or actual fraud. However, to the extent that those debts were obtained by the use of a false oral statement respecting the debtor's or an insider's financial condition, they are dischargeable. We hold that such false statements are those that purport to present a picture of the debtor's overall financial health. Statements that present a picture of a debtor's overall financial health include those analogous to balance sheets, income statements, statements of changes in overall financial position, or income and debt statements that present the debtor or insider's net worth, overall financial health, or equation of assets and liabilities. However, such statements need not carry the formality of a balance sheet, income statement, statement of changes in financial position, or income and debt statement. What is important is not the formality of the statement, but the information contained within it—information as to the debtor's or insider's overall net worth or overall income flow.