Bad Debt Policy Conversation

October 19, 2014

Context:“Stealing” shall mean the taking, keeping, or appropriation of the property of another without the owner’s permission or approval. Stealing also includes the planning of or participation in the taking, keeping, or appropriation of the property of another without the owner’s permission or approval. Stealing may include, without limitation, the passing of bad checks, the failure to pay for goods or services received, the failure to pay rent, and other failures to fulfill lawful financial obligations.

By-law change made last year to clarify an existing assumption behind the bad-debt letters.The Committee also removed the formal procedures (see handout) describing how the VCCR should handle cases of bad-debt.

The problem:• Bad-debt letters presume guilt• No formal procedures govern the process• No formal distinction between good-faith

disputes and bad-faith instances that more appropriately fit the By-law definition of “stealing”

• May interrupt the small claims court/mediation process

Potential Solution I:Get rid of the letters, end the practice of facilitating bad-debt payments

Pros: stealing will no longer be treated differently than any other Honor offense, solves issue with the letters entirelyCons: no longer have a way to preserve trust between University community and corner merchants

Potential Solution II:Amend the By-laws to remove “failure to pay rent” and other language from the definition of stealing.

Pros: we would not take complex rent dispute casesCons: there would no longer be weight behind bad-debt letters, there are situations involving failure to pay rent that would appropriately fall under Honor’s jurisdiction

Potential Solution III:Institutionalize a way to differentiate between good faith disputes and legitimate bad debt. Options:• VCI discretion via role in determining

jurisdiction• VCCR discretion via the process outlined in the

old By-laws.• Institutionalize a separate investigation

procedure as outlined in the student proposal (see handout)