Bonds do not work like cash bail, even if they do allow for the same end result in most cases. For starters, the cost to the person buying the bond is permanent, where bail is refunded once court appearances are successfully met. On top of that, there may be other risk management requirements put in place by the bond company, including collateral for the cost of the bond or even in extreme cases, ankle monitoring or other location management services. None of these additional features are hard and fast rules, but the larger the risk involved in issuing the bond, the more likely they are to be required.
When Do Bond Companies Want Collateral?
Collateral is typically required for bail bonds Scranton PA when the potential loss to the bond issuer is high enough that the only cost-effective way to manage the bond is with additional assurance the cash is recoverable. Since bonds are basically short-term loans, one of the ways to manage this risk is by securing the loan with an asset whose value is nearly equivalent or equivalent to the loan’s value. This is a risk to the borrower, the person getting the bond, though. In the event the defendant fails to appear in court, the bond company could potentially seize the asset and sell it to recoup expenses.
Under most circumstances, this seizure would be a last-ditch attempt to recover funds, after attempting to locate the defendant and working with the court to assure the appearance. Still, as unlikely as it seems, it is a risk. That’s why it’s inherently risky to take out a bond for someone else. You need to be able to trust they will follow through with all their court commitments, or you could potentially take a major financial loss.
More Info for First-Time Bond Buyers
If you’re wondering how much the bond is likely to cost you out of pocket, in addition to any collateral, the prices can waver back and forth quite a bit according to how line-item charges are applied and what extras are required. That being said, it’s generally true that the cost of a bond is about 10% of the bail amount, give or take a bit of wiggle room. That makes it possible to start budgeting the expense, and many bond companies have financing options available in the event the fee is still larger than the buyer is prepared to make in a single payment. If this is a concern for you, make sure to ask about financing when you call to price bonds.