Generally, describes the standard that a party seeking to prove a fact in court must satisfy to have that fact legally established. There are different standards in different circumstances. For example, in criminal cases, the burden of proving the defendant’s guilt is on the prosecution, and they must establish that fact beyond a reasonable doubt. In civil cases, the plaintiff has the burden of proving his case by a preponderance of the evidence. A “preponderance of the evidence” and “beyond a reasonable doubt” are different standards, requiring different amounts of proof.
In terms of burden of proof, there is a significant difference between a bankruptcy adversary action that seeks an undue hardship determination and an action seeking a declaration of whether the underlying obligation is a student loan covered by section 523(a)(8). In any proceeding that involves a determination of the loan’s status under the statutory student loan definition, the creditor must establish by a preponderance of the evidence that the debt is a loan or similar obligation that falls within the scope of one of the provisions of section 523(a)(8). This burden of proof falls upon the creditor regardless of who files the action. As with all claims asserting an exception to discharge, the evidence must be narrowly construed against the creditor. The burden of proof will not shift to the debtor to establish undue hardship unless the creditor first meets the “condition precedent to non-dischargeability” of proving that its debt falls within the statutory definition of a presumptively non-dischargeable student loan. Once it is established that the obligation is covered by section 523(a)(8), the initial burden then shifts to the debtor to make out a prima facie showing that would support a determination of undue hardship.
The 2005 Code amendments applying the discharge exception to private loans create some additional burden of proof tests for creditors. For example, creditors claiming the protection for a private student loan must show that the loan was given solely for costs of attendance at an “eligible educational institution.” Similarly, it should be the creditor’s, not the debtor’s, burden of proof to establish what the “costs of attendance” were as determined by the educational institution.
If a creditor seeking to enforce an obligation claims to be an assignee of a student loan lender, this claim need not be taken at face value. The creditor must be able to prove its status as a party entitled to enforce the note that represents the student loan debt. This typically involves a determination that the creditor is a party entitled to enforce a negotiable instrument under the Uniform Commercial Code.