523 U.S. 213 (1998)
Cohen v. de la Cruz is a pivotal Supreme Court case in bankruptcy law, clarifying the extent to which debts incurred through fraudulent activities are non-dischargeable under the Bankruptcy Code.
The key legal question was whether 11 U.S.C. §523(a)(2)(A) makes a debtor liable for the entire debt awarded due to fraud (including punitive damages and legal fees) non-dischargeable, or merely the amount the debtor fraudulently obtained.
Under 11 U.S.C. §523(a)(2)(A), debts for money, property, services, or credit obtained by 'false pretenses, a false representation, or actual fraud' are non-dischargeable in bankruptcy.
The Supreme Court held that all debts resulting from fraud, including punitive and multiple damages, are non-dischargeable under 11 U.S.C. §523(a)(2)(A).
Cohen v. de la Cruz is significant because it solidified the position that bankruptcy protection cannot be used as a shield for those who commit fraud. This case underscores the importance of bankruptcy as a tool for equitable relief, not for enabling wrongdoing. For law students, it exemplifies statutory construction and judicial interpretation of statutory language, providing insights into the judiciary's role in maintaining economic integrity.