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Grogan argued that the debt should not be discharged because section 523(a) of the bankruptcy code exempts obligations for money obtained by \u0022actual fraud.\u0022 The Bankruptcy Court, based on portions of the fraud case, agreed and did not allow Garner to discharge the debt. The District Court affirmed, but the Eighth Circuit Court of Appeals reversed, finding that the standard of proof used in the original fraud case - the \u0022preponderance of the evidence\u0022 standard - was lower than the standard of proof demanded under section 523(a) - a \u0022clear and convincing evidence\u0022 standard. The Court found that most states used the \u0022clear and convincing\u0022 standard in fraud cases and that Congress would have explicitly stated it if they used a different standard. Moreover, it argued that the intention of the bankruptcy code to provide a \u0022fresh start\u0022 suggested that the standard most favorable to bankruptcy filers should be used (that is, the more demanding \u0022clear and convincing\u0022 standard).\u003C\/p\u003E\n","question":"\u003Cp\u003EWhat standard of evidence should bankruptcy courts apply in considering whether a debt was the result of \u0022actual fraud\u0022 under section 523(a) of the Bankruptcy Code?\u003C\/p\u003E\n","conclusion":"\u003Cp\u003ECourts should apply the \u0022preponderance of the evidence\u0022 standard. Justice John Paul Stevens, for a unanimous Supreme Court, wrote that the lack of a specified standard of evidence in section 523(a) implied that Congress had intended the preponderance of the evidence standard to be used. That lower standard was generally used in civil actions between private parties (including bankruptcy filings) unless particularly important interests were at stake. 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