How does a bail bond work?
We hear on the news all the time how a certain person has been released on $40,000 bail. However, what does that actually mean? What is bail? What is the difference between bail and a Bail Bond?
Whenever a person is arrested for committing a crime, the individual is held in jail either until they get released on bail, the judge releases them on their own recognizance, or until their court date.
What is Bail?
Bail refers to the set amount of money that is used as insurance between the individual in jail (the defendant) and the court. Defendants do have the option of paying their bail in cash. However, many are unable to afford that.
Given that bail is frequently set at a high amount of money, a majority of defendants cannot afford to post bail on their own. Therefore, they seek assistance from a local bail bondsman, or bail agent, who posts a Bail Bond on their behalf.
What is a Bail Bond?
It is a kind of surety bond that a surety bond provides through a Bail Bondsman or bail agent to secure a defendant's release from jail. There are two main kinds of Bail Bonds that are available:
- Criminal Bail Bond: These are used in criminal cases to guarantee that a defendant will appear at trial when the court calls on them and guarantees payment for any penalties or fines that get decided against the defendant by the court.
- Civil Bail Bond: These are used in civil cases to guarantee a certain debt will be paid, plus costs and interest, that is assessed against the defendant by the court.
How do Bail Bonds Work?
A bail amount is set by a judge. If the defendant is unable to pay the bail amount themselves, they can seek assistance from a Bail bondsman who will help them obtain a Bail Bond Expert.
In order to post a Bail Bond, usually, a defendant will be required to pay 10% of the total bail amount to the Bail bondsman.
Then the Bail bondsman will secure the remaining amount of the bail in the form of collateral. If a defendant doesn't have sufficient collateral to cover the bail amount, the Bail Bondsman may seek out friends and relatives to help cover the bail.
Quite often full collateral plus an additional cash payment is required in order to post a Bail Bond.
What happens next will depend on whether or not the defendant appears in court after she or he is released.
- If the defendant fails to make their court appearance: This results in the forfeit of the Bail Bond and the court will require the 90% remaining bail amount to be paid. The defendant's collateral (stocks, jewelry, house, etc.) will be used by the Bail Bondsman to pay the remaining bail amount to the court.
- If a defendant appears for court: Once the court case has concluded, the Bail Bond is then dissolved and then any collateral that has been posted is returned to the owner. A 100% cash fee is kept by the Bail bondsman as profit.
Example of a Bail Bond
For example, Jim is arrested. The court has set Jim's bail at $10,000. Jim wants to be released from jail. However, he does not have $10,000 in cash, so he contacts a Bail bondsman for help to get a Bail Bond on his behalf.
To post the Bail Bond for Jim, and therefore release him from jail, the bondsman requires $1,000.
For the $,9000 bail that remains, the bondsman will secure collateral from Jim and/or his family. Collateral may be in the form of jewelry, a house, a car, etc.
- As long as Jim appears at all his required court dates, no more money will be required by the Bail Bondsman and the Bail Bond will be dissolved when Jim's case has concluded. Jim will get his $9,000 in collateral returned to him, but he will not receive the $1,000 back; that will be kept as profit by the bondsman.
- However, if Jim fails to appear in court, the bondsman will be required to pay the remaining $9,000 in bail to the court. Jim's collateral will be used by the bondsman to do this.
If Jim had posted the $10,000 in cash then at the conclusion of his case, no matter what the outcome was, he would be entitled to receive a refund.
How to obtain a Bail Bond
A major of surety companies actually do not write Bail Bonds due to the associated underwriting problems. The most hazardous of all bonds to write are Bail Bonds.
That is because if a defendant fails to make their court appearance, the surety companies that issued the bond is liable to pay the full bond penalty. Due to the specific nature of surety bonds, of course, the surety company would seek compensation from the defendant to recover the penalty amount they were required to pay.
There are some states that prohibit Bail Bondsman (Wisconsin, Oregon, Kentucky, and Illinois). There are still Bail Bonds in these states, but the 10% bond payment goes to the court instead of a bondsman.
It is very important to fully understand the risks that are involved with Bail Bonds. The total risk for posting a Bail Bond is evaluated by Underwriters before a bond is issued, including the actual case, family circumstances, financial situation, and personal life.
It is not easy to obtain approval and often requires other people to co-sign or indemnify, for the defendant.
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