James K. Collins v. Michell R. Zolnier, dba CKC Properties, Top Star Leases

The Bankruptcy Code bars the discharge of “any debt . . . for money . . . obtained by . . . [1] false pretenses, [2] a false representation, or [3] actual fraud.” 11 U.S.C. § 523(a)(2)(A). This Court holds “actual fraud” bars discharge under Section 523(a)(2)(A) of the Bankruptcy Code when the debtor has deliberately obtained money through a fraudulent-transfer scheme that was actually intended to cheat a creditor. Husky Int’l Elecs., Inc. v. Ritz, 578 U.S. 355, 360 (2016). The Fifth Circuit’s decision conflicts directly with this Court’s precedent. The question presented is: Whether the “actual fraud” bar to discharge under Section 523(a)(2)(A) of the Bankruptcy Code applies when transfers made by the debtor were deliberately made to impair the creditor’s ability to collect the debt (cheat the creditor).