Generally the ultimate goal of a debtor who files for bankruptcy is to receive a discharge of his debts in order to get the coveted fresh start offered through the process of Bankruptcy. However in certain scenarios a debtor may not be entitled to a discharge of his entire debt if a creditor can make a claim specified by the code that would “except” it from discharge. These exceptions to discharge are enumerated in § 523 of the Bankruptcy Code. Of these exceptions one that is of particular use to a vigilant creditor is § 523(a)(2)(A), which sets forth an exception in the event that a creditor can prove that the money was obtained by the debtor through actual fraud.
In determining whether § 523(a)(2)(A) applies a court will look to the common law factors of fraud. If the creditor can prove, by a preponderance of the evidence, that the debtor made a representation that he knew to be false with actual intent to deceive the creditor and the creditor justifiably relied on that representation and sustained damages, than the creditors claim will be excepted from discharge and the debt will pass through the bankruptcy. What this essentially means is that a creditor may be able to hinder a debtor’s fresh start by proving that the money surrounding the debt was obtained through fraud. There is more than just one exception to discharge that a creditor can make use of. It is important for a debtor to be aware of these scenarios since the presence of certain elements could irreversibly damage a debtor’s bankruptcy.