On July 18, Kegler Brown attorneys and guest speakers presented on a variety of current issues relevant to credit professionals, including collections, managing privacy + security risk, accounts receivable and bankruptcy case updates.
5. z
Additional Consideration at the
Start of a Relationship
Think Outside the Box File in Proper Place Keep It Current
Security Agreements
6. z
Steps for Prompt Collection
+Keep Close Eye on Receivables
+ Easier to Collect when “Younger”
+Demand Letters
+ From you
+ From an attorney
+ Act on them if no response
7. z
Different Corporate Structures =
Different Ways to Collect
If Nonpayment
INDIVIDUAL
Could pursue the
individual and all assets
CORPORATION | LLC
Personal guaranties in
order to pursue individuals
9. z
Collection Via Litigation cont’d
If no response, obtain a Default Judgment.
Still need to collect the judgment. A
judgment is only a piece of paper.
Can not “cash it in”.
10. z
Collection After Judgment
Wage Garnishments1
Bank Account Garnishments2
Attachment of Assets3
Judgment Debtor Examination4
Certify Judgment and Attach to Real Property5
Creditors Bill6
11. z
Garnishment of Personal Earnings
Garnishment is
ongoing and
continuing
Paid as often as
the judgment
debtor is paid
Cannot garnish a
corporation
or LLC
Creditors can garnish the debtor’s wages
14. z
Judgment Debtor Examination
+ Allows a creditor to ask Debtor questions under oath
+ Allows a creditor to get a big picture view of assets, along with details
+ Good chance Debtor may not show up to exam
+ Can be held in contempt of court for failing to show
+ A warrant for arrest can be issued but just to individuals
15. z
Certification of Judgment
+Attached to all real property owned in county
+Will be paid if debtor sells property
+Can foreclose on property
+Can transfer judgment to other counties + states
17. z
Receiverships
Move to have receiver
appointed
Paid from the assets of
the company
Receiver will either…
A Run the company
OR
B Sell or liquidate the
company
18. z
Piercing the Corporate Veil
Regular
meeting of
members Corporate
records
Separate bank
accounts
without comingling
of funds
19. z
Avoiding Fraudulent Transfers
+If a company or individual tries to
move assets during the time you
are seeking to collect, you can
avoid these fraudulent transfers
to get those assets back into the
collection pool.
+Requires a separate suit
+Use ORC § 1336.04
20. z
Have to show:
A. The transfer was made with actual intent to hinder, delay or defraud a
creditor, as judged by a number of factors the court considers, (A) (1), or
B. it was made without receiving a reasonably equivalent value for the
transfer and the debtor was engaged or was about to engage in a
business or a transaction for which the remaining assets of the debtor
were unreasonably small in relation to the business or transaction; or
C. the debtor intended to incur, or believed or reasonably should have
believed that the debtor would incur, debts beyond the debtor's ability to
pay as they became due. (A)(2).
ORC § 1336.04
21. z
Bankruptcy
+New set of rules
+Protect your rights
+Can get sued
+Do not violate the automatic stay
22. zz
Thank You!
Stephanie P. Union
Director, Kegler Brown Hill + Ritter
sunion@keglerbrown.com
keglerbrown.com/union
614-462-5487
24. z
Understand
GOALS
Cyber security is a business issue, not just a technical issue
Common current cyber business threats
Best practices for managing privacy + security risk
27. z
Prevents unauthorized
disclosure of sensitive
information
Prevents unauthorized
modification of data,
systems, and information,
thereby providing
assurance of the accuracy
of information
Prevents of loss
of access to resources
and information to
ensure that information
is available for use
when it is needed
Availability
Information Security 101
28. z
Cost of a Data Breach
Cost per record
Global Average
$158 +15% since 2013
Highest
Countries
Lowest
Countries
$221
United States
$100
Brazil
$213
Germany
$61
India
Cost per incident
Global Average
$4M +29% since 2013
Highest
Countries
Lowest
Countries
$7M
United States
$1.8M
Brazil
$5M
Germany
$1.6M
India
Source: https://www.ibm.com/security/data-breach/
30. z
And How Others See you …
Your Cyber Footprints Matter
Publicly available information:
+ Indicators of compromise
+ Infected machines
+ Proper or improper configuration of
certain security controls
+ Positive or poor security hygiene
+ Potentially harmful user behaviors
Security health & hygiene being used to:
+ Select and manage vendors
+ Insurance underwriting decisions
+ Mergers and acquisitions
+ SMB / mid market firms are expected to have enterprise scale InfoSec /
Compliance programs
31. z
Common Threats By Technique
+ Techniques change over time.
+ We build a 10 foot wall & the hackers build an 11 foot ladder.
+ Focusing only on technique will lead us astray.
+ Phishing
+ Spear phishing
+ Whale phishing
+ Botnets
+ Distributed
denial-of-service
(DDoS)
+ Baiting
+ Hacking
+ Malware
+ Pharming
+ Phishing
+ Ransomware
+ Ransacking
+ Spam
+ War driving
+ War dialing
+ Web defacement
+ Distributed Malware
Attacks
35. z
Five Steps to a Security Program
1. ORGANIZE
• Build a Team
• Select a Framework
2. PLAN – Understand & Prioritize Risk
• Likelihood and Impact of
Threats to Assets
• Consider all assets, all data flows, 3rd Parties
3. DO – Mitigate Risks with Controls
• Manage Risk in a Risk Register
• Remediate or fix risk with Controls from selected framework
4. CHECK – Measure & Test Controls
• Security Assessment
• Penetration Tests
• Asset / Form Factor Focused Tests
5. ACT – Correct & Improve
6. REPEAT!
36. z
Organize – Select a Framework
Regulatory Authority Framework Source
HIPAA
Fed Contractors
Defense Supply Chain
Critical Infrastructure
Financial Institution
Some B2B Buyers
NIST 800 series https://www.nist.gov/
Payment Card Industry PCI DSS https://www.pcisecuritystan
dards.org/
International Business
Some B2B Buyers
ISO 27K (27001/27002) https://www.iso.org/isoiec-
27001-information-
security.html
Multi-Authority ISO 27K to Organize
NIST to Prescribe Controls
Are you regulated?
If yes, select framework most closely associated with regulations:
37. z
Organize – Select a Framework
https://commonsenseframework.org/
Are you regulated?
If no, consider Common Sense Security Framework (CSSF) with 49 controls:
+ Protect Your Applications
+ Protect Your Endpoints
+ Protect Your Network
+ Protect Your Servers
+ Protect Your Data
+ Protect Your Locations
+ Protect Your People
40. z
Check - Measure and Test
+ Risk (Risk Assessment)
+ Compliance (Control & Compliance
Assessments & Audits)
+ IT assets for weakness (Vulnerability
Assessment & Penetration Testing)
• Network
• Devices of all kinds
• Cloud
• Appliances
+ Key processes for weakness
(Vulnerability Assessment)
+ Employees ability to fend off phishing
attacks (Social Engineering Testing)
+ Data leakage (Sensitive Data Scans |
Open Source Intelligence Testing)
+ Ability to react to disaster or security
incidents (Table Top Testing)
41. z
General Best Practices
+ Keep operating systems up to date
+ Keep software up to date
+ Create a clean installation restore point
+ Install a traditional antivirus for reactive
protection
+ Install a security solution against
spyware
+ Back up your system & information
+ Be careful online and don’t click
suspicious links
+ Have a second admin account that you
only use to take care of the PC
+ Set strong passwords
+ Keep your user account control turned
ON
+ Secure web browser before going
online
+ Use BitLocker to encrypt your hard drive
+ Keep it locked up
42. z
Spear-phishing Best Practices
+ Think Twice before clicking – spear phishing works
because it conveys a sense of urgency
+ “Show details” on emails (be careful on mobile or with Gmail)
+ Use common sense and beware
+ When in doubt, call to verify
+ Enable 2 factor authentication for account
communication where possible
43. z
Ransomware Best Practices
+ Back up, back up, back up – it’s a pain, but DO IT.
+ Install security updates as soon as they are available.
+ Antivirus
+ If you decide to pay the ransom, remember that there is no
guaranty that they will be honorable and supply the key
+ If possible, unplug rather than power down
45. z
Web Browsing Best Practices
+ If using sensitive data, then HTTPS (not HTTP)
+ Consider the use of a browser add or HTTPS
Everywhere from the Electronic Frontier Foundation
+ Avoid public WiFi
+ Don’t forget to log out
46. z
Mobile Best Practices
+ Use most current operating system and update
whenever updates are available
+ Enable your passcode lock/pin
+ Enable wiping and device tracking
+ Enable encryption both on phone and for
backups
+ Be cognizant of access/permission requests when
downloading apps
+ Update settings related to downloads from unknown
sources – check box in Android settings
+ Be cautious when dealing with unsecured hotspots and
QR codes
+ Do not “jailbreak” or “root” your phone
47. z
Password Best Practices
+ Change default passwords
+ Do not reuse or daisy chain passwords
+ Long pass phrases recommended
+ Do not keep a file with the word, “password”
+ When possible, use two factor authentication or
other tools
+ Fingerprint scanners
+ Text messages
+ Security tokens
+ Consider the use of a password manager
48. z
Best Practices for Disposal of Data
Consider guidance found in: NIST SP 800-88 rev. 1.
+ Media sanitization
+ Clear, Purge and destroy
+ Deguassing (change the magnetic polarity) – only works on magnetic storage –
magnetic drives, not flash drives or CDs
+ Overwriting (wiping)
+ Physical destruction
+ Mobile
+ Factory reset
+ Physical destruction
50. z
Best Practices from the IRS
If your SSN is compromised and you know or suspect you are a victim of
tax-related identity theft, the IRS recommends these additional steps:
+ Respond immediately to any IRS notice; call the number provided.
+ Complete IRS Form 14039, Identity Theft Affidavit, if your efiled return rejects
because of a duplicate filing under your SSN or you are instructed to do so. Use a
fillable form at IRS.gov, print, then attach the form to your return and mail
according to instructions.
+ If you previously contacted the IRS and did not have a resolution, contact us for
specialized assistance at 1-800-908-4490. We have teams available to assist.
53. z
+ David Wilson has been a global business attorney
with Kegler Brown since 2011.
+ He is a member of the International Association of
Privacy Professionals and is a Certified Information
Privacy Manager.
+ David regularly works with clients to safeguard their
information and intellectual property interests and
comply with domestic and cross border compliance
obligations, through the development of privacy
frameworks, policies, certifications, and drafting and
negotiating of technology licenses, joint venture
agreements, and service agreements with an eye
toward preparing for and responding to data
breaches.
DAVID WILSON
dwilson@keglerbrown.com
(614) 462-5406
54. z
+ Doug’s passion is for the business side of the
information risk management, security and
compliance equation.
+ He works with business leaders and executives in
small and middle market companies to assess and
improve the operationalization of information risk and
information security programs.
+ Doug also advises information security and
compliance leadership in larger enterprises focusing
on control assessment and improvement in areas such
as security leadership, policy and procedure, security
awareness, third party risk management and
compliance with HIPAA, PCI and ISO 27001.
DOUG DAVIDSON
ddavidson@gbq.com
(614) 947-5259
58. z
▪ 44% more confident in
business growth prospects in
2017 vs 22% in 2012 (down
from 50% in 2016)
▪ 40% found limited access to
capital to be one of the least
influential impediments to
U.S. GDP Growth next year.
▪ Government regulations was
reported to be the most
influential at 39%, close 2nd
with Global political and/or
economic conditions at 32%
Capital-Plus, Inc. | www.capplus.com
60. z
▪ Cost of capital and accessibility of
capital varied by capital type, size,
and perceived risk.
▪ Primary borrower motivation to
secure financing:
+ 32% refinance existing loans or
equity,
+ 18% management buyout and
+ 15% worsening conditions
Q2, 2012 Q1, 2017
Bank Loans 68% 76%
Grants (SBIR, STTR,
etc.)
29% 41%
Crowdfunding 10% 40%
Trade Credit 35% 22%
Angel 30% 25%
VC 26% 27%
PEG 28% 29%
Banks ABL Mezz PEG VC Angel
4% - 6% 5.5% -
14.0%
10.0% -
24.0%
20.5% -
27.5%
25% -
35%
35% -
60%
Primary reason for declined loans:
31% quality of earnings/cash
flow
20% insufficient collateral
18 % debt load
61. z
High
Cash flow determines sustainability
Low
Growth/
Activity
Opportunity Inception Launch HarvestGrowth Evolve / retire
Start up
Mid-market
Enterprise (departmental)
Small Business
Company
Size
Business Needs Change Over Time
62. z
Accounts Receivable 101
Small Business Reality
1. Win the sale
2. Execute as promised and ask for more
business
3. Invoice Client
4. Wait to Receive Payment
_______________________________________
Risks:
+ Never get paid
+ Get Paid in 45, 60, 77, or 120 Days
+ Take a discount on invoice value
64. z
• Sales & Credit go hand in hand
• Establish a Credit Policy
o Establish a DSO Goal and
understand the impact on
cash flow
o Extend credit decisions
based on information -
know your risk
o Set the limit and the term
o Follow the Policy
• Invoicing Methods
o Clarity
o Complete
o Correct
• Manage Receivables
Carefully
o Verify Invoice received
and complete
o Call on every invoice
o Cash Discount Plan
o Fees for late pays
Accounts Receivable 101
66. z
Define Procedures
• Evaluate Creditworthiness of Customers (New
and Existing)
• Perfect Invoicing Procedures
o Terms & Conditions of Sale
o Required Supporting Docs
o Remit to instructions
• Collections Procedures
o Office Procedures from beginning to end
o Disputes & Deductions
o Credit Holds or Payment Plans
Define Goals in line with company cash flow
requirements (ideal DSO) and financial objectives
Define roles, responsibilities, and authority
Measure Results
Impact of DSO
on cash flow
Key Elements of a Solid Credit Policy
67. z
Requested Credit
Limit
Credit Application
Completed and Signed
Check
References
Obtain Credit Report Initial Terms Credit Limit Approval
<$250.00 Yes Yes No
Prepaid
then Net 30
$250.00 Analyst
$500 - $2500 Yes Yes Basic Report
Due on Receipt
then Net 30
$500 - $2500 Credit Manager
>$2500
Yes w/signed personal
guarantee & financials
Yes Full Report
50% on 1st order
then Net 30
???? Credit Manager
Extending Credit To New & Existing Clients
71. z
America’s oldest form of financing and yet, the most
misunderstood…
• Flexibility
• Measurement of Success
• Fees / Rates / Terms
• Notification
• Management Services
• Client Support
Invoice
Value
Advance
Rate (,85%)
Fees DSO Cost per
Transaction:
$10,000 $8,500 1% every 10
days
45 5%
$500
Accounts Receivable Financing
72. z
• Leveraging Receivables for cash flow
• Serving Small to Mid-Sized Businesses
Easy Application Process
Mitigates: historical financial performance, personal credit issues, length of
time in business
Assets pledged as collateral
Notification/Verification
Boutique lenders providing additional services for small business
Trade Finance
73. z
Trade Finance
More expensive than a
traditional line of
credit for ongoing
financing.
Not regulated, so do
your homework on the
company you choose.
74. z
Traditional Line of Credit
Leveraging
Receivables as an
Asset for Traditional
Financing
Leveraging Receivables
as an Asset for
Traditional Financing
75. z
Traditional Line of Credit
• Typically require at least 2 years historical financials
with positive cash flow
• Receivables often are valued at 70%, concentration
and age will play a role in value
• Complete loan package required
• Often priced variable w/in relation to Prime
77. z
A/R usually large item on business balance sheet
Credit manager protects asset value
Prompt and complete collection required
Avoidance of losses due to collection issues
Accounts Receivable –
A Valuable Business Asset
79. z
Alternative Devices to Secure Payment
Sale of A/R or
factoring of
accounts
Financing with
A/R as collateral
Revolving credit
terms and
conditions
Usually no
notification to
account debtors
80. z
Nature of trade credit insurance
How insurance of receivables works
Typical covered losses
Types of available policies
Cancelable or non-cancelable coverage
Export trade credit insurance
Trade Credit Insurance
81. z
Reduce or limit bad debt losses
Offer more aggressive credit terms
Possible reduction of bad debt reserves
Assist in meeting bank covenants
Insurer data base supports credit analysis
Insurer may assist in funding litigation on account
Key Benefits to A/R Insurance
82. z
Cost of insurance
coverage and
timing
Not all industries
are covered
Insurer may
conduct its own
credit evaluation
and payment
history
Insurer may
require coverage
of entire portfolio
Imposed credit
limits hinder
flexibility
Claims disputes
not uncommon
Drawbacks + Limitations of Credit Insurance
84. z
Trade Receivable Put Options
Guaranteed promise to
buy single account
Applicable upon
customer bankruptcy
Normally covers specific
time period
Exercise of put
is optional
Higher risks and higher
premium costs
Flexible coverage of cost
of goods or profit
May be available for
DIP sales
Deductibles and
purchase rate
90. z
Automatic Stay
Creditors cannot take action against the debtor or
against the property of the estate, or exert control
over property of the estate
+Can’t make collection calls or send demand letters
+Can’t file a lawsuit or enforce a judgment
+Can’t repossess collateral or setoff debt
+Can’t allow prior actions to proceed
+ i.e., wage garnishments or bank attachments
91. z
Purpose of the Automatic Stay
+ To provide the debtor with a “breathing spell” from
creditor action
+ To promote an orderly administration of the case,
including equality of distribution among claimants
and prevention of claims being filed in different
forums
92. z
Penalties for Violating the Stay
1. Compensatory damages for
any violation
• Lack of actual notice is
not a defense
2. Punitive damages for
willful violation
3. Courts are very hard on
creditors who received notice
of bankruptcy, even if creditor didn’t have actual
notice (i.e., if creditor’s system didn’t catch the
notice)
93. z
Stay Safe
+Make sure you have a system in place for
notices of bankruptcy
+Any employee anywhere in your organization
who may make collection call against your
account debtor must be immediately advised if
a bankruptcy has been filed
+Especially important if you have multiple
offices and mailing addresses
94. z
Stay Safe
+The automatic stay is interpreted very broadly
+Obtain relief from stay if appropriate
+ To repossess collateral
+ To proceed with a pre-petition lawsuit against non-debtor
parties
95. z
Special Issue: Liens
+The automatic stay does NOT prevent a creditor from
perfecting a lien
+If you have an unperfected lien (i.e., mechanic’s lien),
you can perfect the lien even if a bankruptcy is filed
96. z
Special Issue: Setoff
+If you are holding funds that belong to the customer,
your contract with debtor may give you a right of
setoff
+Must obtain relief from stay to exercise right of setoff
+Can freeze account until you obtain relief from stay
97. z
Special Issue: Co-Debtor Stay
+Two borrowers are jointly liable on a debt
+One borrower files a chapter 13 bankruptcy
+Automatic stay prevents creditor from collecting debt
from the non-filing co-debtor
98. z
Special Issue: Co-Debtor Stay
Creditor can move for relief from co-debtor stay if:
+Debtor’s chapter 13 plan does not propose to pay
creditor in full, or
+Non-filing borrower received consideration for the
claim (not just a guarantor, etc.)
99. z
Should you attend the creditor
meeting?
+Creditor representative
can attend
+No need for counsel to
attend
+Gives an opportunity
to question the debtor
100. z
Attend the Creditors Meeting?
Consider:
+Whether the claim
is secured by
collateral
+Whether there was
some irregularity in
the extension of
credit, i.e., false lien
waivers or credit
application
102. z
When to File a Claim
+Creditors can file a claim as soon as they receive the
notice of bankruptcy
+Deadline to file claims is stated on the notice of
bankruptcy – typically 120 days
+You may receive no distribution even if you file a claim
103. z
Special Issue: Filing Claims
+New forms required effective December 2016
+The form included with the Notice to File Claim will be
accurate
+If you handle reaffirmations, those forms also
changed
104. z
Special Issue: Expired Claims
+New Supreme Court decision -- An expired statute of
limitations is not a barrier to filing a proof of claim
+BUT the trustee or debtor may object to the claim
105. z
Preference Defense + Negotiations
1. Correct any inaccuracies in the trustee’s demand
2. Offer a data analysis that establishes your defenses
3. Make a counteroffer
106. z
What is a Preference?
Payment or transfer made during the
ninety days prior to bankruptcy
Debtor makes a payment or payments to
some creditors and not to others
90
107. z
Elements of a
Preference Claims
Transfer of
property of
a debtor
To or for
benefit of
creditor
On account
of an
antecedent
debt
Made while
debtor was
insolvent
Within 90
days before
bankruptcy
Enables
creditor to
receive more
than if transfer
had not been
made
Within
90 days
prior to
bankruptcy
108. z
Debtor/trustee must prove each
element of preference
Burden of proof for elements is
on debtor/trustee
Creditor can establish an
“affirmative defense”
Creditor has burden of proof on
any affirmative defense
Defense Considerations
110. z
+ The demand may include credits as transfers
+ The demand may be based on incomplete
information
+ The demand may completely omit new value
that you provided
+ The demand may claim transfers which were
returned NSF
PHASE
1
111. z
+Verify the delivery dates
+Verify the payment dates
+ Date when payment was received
+ Date when payment cleared debtor’s bank
PHASE
1
112. z
+Analyze the defenses available to you
+Gather historical data and industry
data
+Structure your data analysis to
support those defenses
PHASE
2
113. z
+Let’s talk about defenses
+ Ordinary course of business
+ Subsequent new value
+ Contemporaneous exchange
+ Lien rights issues
PHASE
2
114. z
Ordinary Course of Business Defense
Encourages creditors to deal with
companies on “normal” credit terms
115. z
Ordinary Course of
Business Defense
The debt was incurred in the ordinary course of the business
between debtor and creditor, AND:
EITHER
Payment is made in the ordinary course of business
of the debtor and the transferee
OR
Payment is made according to
ordinary business terms in the industry
116. z
Ordinary Course of Business
Between the Parties
Consistency with other business transactions between
parties
Examines course of conduct + payment history prior to
filing
Historical period v. preference period
Consistency late payments may qualify as ordinary
payments
Payment that is “normal” in parties’ course of dealing
117. z
Payment NOT in subjective
ordinary course of business
Creditor requires a cashier’s check for the first time
Creditor imposes new terms during the preference period
Payment results from coercive collection practices
Creditor imposes or threatens credit hold
118. z
Ordinary Business Terms:
Objective Ordinary Course
Payment is “ordinary” in relation to the relevant industry
standard
Examine industry as a whole
Explore practices common to similarly situated
businesses
Usually requires expert testimony
119. z
Subsequent New Value Defense
Creditor may have replenished the value of Debtor
by continuing to supply goods/services
120. z
Subsequent New Value
Transfer by creditor after payment received
Not secured by “otherwise unavoidable” security interest
On account of which new value debtor did not make
an otherwise unavoidable transfer to or benefit of creditor
New value determined as of petition date,
so post-petition payments are not relevant
121. z
Subsequent New Value Defense
Creditor may have replenished the value of Debtor
by continuing to supply goods/services
122. z
Subsequent New Value
+May not be available if Creditor retains a security
interest
+May not be available if Debtor later paid for the new
goods prior to the petition date
124. z
Lien Rights Defense
Creditor had lien rights or security interest and
therefore would have received full payment from
collateral regardless of preferential payment
125. z
+Demands and counteroffers
+Trustee generally demands 100% of
preference payment
+Present all defenses in a persuasive
manner, then offer a portion of your
exposure
PHASE
3
126. z
+Don’t wait for the preference demand
letter
+Consider addressing a potential
preference earlier in the case, such as
+ When debtor wants to negotiate post-
bankruptcy terms
+ When discussing 503(b)(9) claims
+ When discussing reclamation claims
+ When discussing lien rights
PHASE
3
127. z
+The type of bankruptcy becomes
important in preference negotiations
+Chapter 7 claims are sometimes
cheaper to resolve
+Chapter 11 claims may be more
regimented
+Court approval of a settlement may
be required in some cases
PHASE
3
128. z
+If the bankruptcy is a large chapter 11
with many preference claims, the
court may have entered an order
establishing preapproved settlement
terms
+This is a shortcut to see the minimum
that the debtor can accept without
requesting court approval of the
settlement
+Exactly like seeing the opponent’s
playbook
PHASE
3
129. z
Customer has payment problems?
+Be aware of changes in the customer relationship
+Maintain consistency in the customer relationship
+Consider retaining a security interest
+Consider requiring COD terms
130. z
Customer has payment problems?
+Accept payments even if you are wary of a looming
bankruptcy
+If a bankruptcy is filed, maintain the invoice/payment
records in case you receive a
preference demand up to
2 years later
131. z
Special Issue: Dischargeability
+Prevent the debtor from escaping liability
+Only for special circumstances
+If you win, the debtor still owes the debt BUT there’s
still no guarantee of collection
132. z
Dischargeability of Certain Debts
+ Money/services obtained by false pretenses,
false representations, or actual fraud
+ Embezzlement, larceny, or defalcation
+ Debts for willful or malicious injury by the
debtor to another entity or to the property of
another entity
+ Failure of the debtor to name the creditor in
the bankruptcy, unless the creditor had notice
or actual knowledge of the case
133. z
Dischargeability of Certain Debts
+Creditor/claimant must file a complaint in the
bankruptcy court by the deadline
+Debtor has the opportunity to defend the
complaint and try to overcome the
presumption
+These are hotly contested and can involve a lot
of legal costs