Case Summary:
Plaintiff filed a Chapter 7 petition and received a discharge. Plaintiff then filed an adversary seeking to discharge a student loan under 11 U.S.C. § 523(a)(8). Plaintiff denied ever taking out a student loan, but Defendant claimed Plaintiff signed it on behalf of his daughter and that it survived discharge. Neither party produced evidence of loan documents or the existence of a debt in advance of trial, and the opportunity to file evidence expired. Without evidence the loan existed, the Court ordered briefing on the burden of proof for establishing the existence of a student loan under 523(a)(8). Defendant challenged the Court’s jurisdiction. The Court held it had jurisdiction over the adversary because (1) Plaintiff stated a 523(a)(8) claim, (2) the Order of Discharge explicitly did not affect the adversary, and (3) the validity of the signature on the student loan related directly to Plaintiff’s liabilities. While the Debtor bears the burden of proving undue hardship, the creditor bears the initial burden of proving a debt exists and proving the debt is of the type excepted from discharge. Therefore, the Court held Defendant bore the burden of proving a debt exists but failed to produce any evidence to that end. Thus, no presumption of validity for the signature arose under Wisconsin’s negotiable instruments law, Wis. Stat. § 403.308(1). The Court declared the debt—if any—discharged.

Statute/Rule References:
11 U.S.C. § 523(a)(8) -- Nondischargeability - Student Loans
11 U.S.C. § 1322(b)(2) -- Modification of Rights of Secured Claimants
Fed. R. Bankr. P. 3012 -- Valuation
Wis. Stat. § 403.308(1) -- Proof of Signature and Status as Holder in Due Course

Key Terms:
Burden of Proof
Jurisdiction
Nondischargeable Debt
Student Loan