This educational guide is based on the linked primary sources. It is not a Court publication, is not affiliated with the Court, and is not legal advice.
In brief
Overview
According to Petitioner, the case concerns the interpretation of Section 523(a)(2)(A) of the Bankruptcy Code, which bars the discharge of debts obtained by fraudulent statements, except when the statement concerns the debtor’s financial condition.
Both the petitioner, the respondent, and the United States (Amicus) argue about the meaning of a “statement respecting financial condition” and whether it should be limited to balance‑sheet items or include broader statements about ability to pay.
Background and question before the Court
According to Petitioner, the parties ask the Court to interpret the phrase “statement respecting financial condition” in Section 523(a)(2)(A).
What each side argues
Petitioner Position
The petitioner argues that a statement about a single asset or liability is not a “statement respecting financial condition.”
Government (Amicus) Position
According to Government, the United States, as amicus, argues that Section 523(a)(2)(A) should be read in light of the specific problem it was intended to address.
Respondent Position
The respondent contends that “ability‑to‑pay” statements are part of financial condition and should be considered under the discharge exception.
What happened at oral argument
Justice Ginsburg asked: “What is a statement respecting financial condition? In addition to a balance sheet and a profit and loss statement, what else would qualify?”
Justice Kagan asked: “What do you think the difference is between ‘relating to’ and ‘about’?”
Justice Ginsburg later asked for clarification on the argument.
Justice Kagan asked: “Which says more about your financial condition, Mr. Garre?”
Justice Sotomayor asked about the argument that Congress was seeking to protect debtors from credit‑card companies omitting particular items.
Justice Alito asked: “Would you respond to Mr. Garre’s argument that the statement here concerns ability to pay and not financial condition?”
Justice Ginsburg asked: “What about the argument that you would be putting a burden on small businesses that deal informally?”
- [1] f233916598fcdeb93b81-r1-b2eb95a27a0d39eb.pdf, p. 5
- [2] f233916598fcdeb93b81-r1-b2eb95a27a0d39eb.pdf, p. 7
- [3] f233916598fcdeb93b81-r1-b2eb95a27a0d39eb.pdf, p. 24
- [4] f233916598fcdeb93b81-r1-b2eb95a27a0d39eb.pdf, p. 25
- [5] f233916598fcdeb93b81-r1-b2eb95a27a0d39eb.pdf, p. 43
- [6] f233916598fcdeb93b81-r1-b2eb95a27a0d39eb.pdf, p. 45
- [7] f233916598fcdeb93b81-r1-b2eb95a27a0d39eb.pdf, p. 47
What the Court decided
Why it matters
Terms to know
- financial condition
- A term of art used by Congress and in commercial practice to refer to one’s overall financial status.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- f233916598fcdeb93b81-r1-b2eb95a27a0d39eb.pdforal argument transcript
Guide generated September 26, 2026. Automated validation accepted this version.