Collateral?

 

What is Collateral?

Collateral is something of value that is used to guarantee a debt.  In the case of a bail bond, collateral is used to guarantee the full bond amount and, possibly, the bond premium.  It is used as an incentive to ensure the appearance of the defendant.

 

Types of Collateral

There are many types of collateral.  However, EVERY bond has at least the following two forms of collateral as required by Florida Statute:

 

• Promissory Note -- This is a promise to pay the FULL amount of the bond(s) should the defendant fail to appear and should the bond amount become due to the clerk of court.

• Indemnity Agreement -- This is a hold-harmless contract that makes the signer responsible for ANY and ALL expenses that are related to the execution of a bail bond.  These expenses typically only come into play if a defendant fails to appear and the bondsman finds it necessary to track and re-arrest the defendant.  These expenses can include but are not limited to:

                   -- Travel Expenses

                   -- Investigative Costs

                   -- Attorneys Fees

 

If a bondsman deems it necessary to take additional collateral besides the two main forms of collateral listed above, then the following may be used:

 

• Cash or Credit Card

• Real Estate

• Stocks/Bonds

• Vehicles

• Jewelry

• Electronics

 

Is it necessary?

NOTE: NO COLLATERAL NECESSARY IF YOU QUALIFY!  

THE MAJORITY OF THE BONDS THAT WE WRITE DO NOT NEED ANY ADDITIONAL COLLATERAL BESIDES THE PROMISSORY NOTE AND THE INDMENITY AGREEMENT!  

 

There are many factors that come into play when determining whether or not a bond needs to be collateralized with additional collateral.  Following are the criteria that are used to determine that necessity:

 

• Financial "strength" of the main indemnitor -- How easily can he/she pay the bond should it become necessary?

• Defendant's ties to the community -- How long has the defendant been a resident of the area where the offense took place?  Where does the defendant's family and extended family live?

• US citizenship -- Is the defendant a US citizen and, if not, how easily will they be able to return to their home country?

• Severity of the crime -- Is the defendant facing a lengthy prison sentence if convicted?

• Extensive arrest history -- Does the defendant have an extensive rap sheet which might get him habitualized?

• History of FTA (Failure to Appear) -- Has the defendant been diligent in showing up for court in his previous cases?

• Probation -- Is the defendant currently on probation and will that probation be violated with the current arrest, causing a warrant to be issued and the defendant to be arrested again?

 

When is it returned?

Collateral is returned once a case has been adjudicated.  The clerk of court has 10 business days to notify the bondsman that the bond has been discharged.  The bondsman then has 21 calendar days to return whatever collateral he is holding.  

 

NOTE: Collateral may only be returned to the owner of said collateral, unless the owner gives express permission to release it to someone else!

 

 

 

 

 

 

 

 

 

 

 

 

 

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