difference between a surety bond

What is the difference between a cash and corporate surety bond?

January 31, 2022 12:09 pm Published by Leave your thoughts

Nobody likes to spend time in jail, especially if they haven’t been convicted of anything. So when law enforcement charges someone with a crime, the court may give them the option of being released while awaiting trial. They do this in various ways, including releasing people on bond. A bond is essentially a form of bail used to get someone out of jail.

Surety bonds and cash bonds both guarantee that a person will appear in court. In brief, after the amount of bail is decided, both a surety bond and a cash bond release you from jail. The person who pays the money and assumes the risk is the main distinction between surety bonds and cash bonds.

What Is a Cash Bond?

A cash bond is a sum of money paid to the court system to get someone out of jail. If the person didn’t appear in court when summoned, or violates the terms of their bail, the court can hold a hearing to forfeit the money. A cash bond has the advantage of being a direct and, in most cases, quick method of bailing someone out.

Furthermore, if the person shows in court as necessary, the court will return the cash to the person who paid by the bond (sometimes the defendant but often a friend or family member). When you pay cash bail for someone, on the other hand, you run the risk of losing every dollar if the accused does not appear in court 

While many states allow cash bail to be posted online, New Hampshire still require it to be paid in person in cash or by certified bank check.

What is Surety Bond?

Due to changes in the New Hampshire bail statute, very rarely do judges issue surety bonds anymore. In fact, some observers have noted that no more bail bonds companies are currently operating in the state. Therefore, the information discussed about surety bonds is more useful for historical perspective, and for those who may be arrested or dealing with the criminal justice system in other states.

Surety bonds are essentially loans used to pay for bail. The contractor also functions as a bail bondsman. Bail is posted once the bail bondsman and the incarcerated individual communicate. On the other hand, the bail bondsman does not pay for the bailout of their pocket. To get the funds required to post bail on behalf of defendants, the bail bondsman calls the trusted surety company with whom he or she works. The money is restored as long as the defendant arrives in court on time.

In short, surety bonds are more complicated than cash bonds since they involve more parties. In addition, a surety bond comes with an added risk: if the defendant fails to appear in court on time, the bond court will keep the entire sum of bail. On the other hand, the defendant pays a premium to the bail bondsman for them to be fully accountable for the total bail sum. The bail bondsman mitigates this excessive risk by asking for personal property as collateral from the charged defendant.

With a surety bond, the surety business also assumes the risk. This danger, however, is lower than that of a bail bondsman. The surety company lends the bail bondsman the entire bond amount, putting them in danger of losing the money. However, because bail bond specialists and surety firms work together daily, trust has developed. The surety company makes money by charging the person accused of the crime a fee to use its services. Some defendants will prefer a cash bond over a surety bond because surety bond fees can be rather exorbitant.

What Is the Difference Between Cash Bonds and Surety Bonds?

The primary contrast between cash and surety bonds is the number of participants engaged in each bond. Three parties are involved in a surety bond: you, the court, and the bail bond business. A cash bond only involves two parties: you and the court.

However, this distinction has ramifications for what happens to your money if the offender fails to appear in court or violates other bail conditions.

When a Cash Bond vs. a Surety Bond is used, who is at risk?

When you secure a bond to bail someone out of jail, you promise the court that the person you’re bailing out will appear in court as scheduled. Whether you post money or a surety bond, the court will keep the money if the offender fails to appear.

Here’s what you need to understand about whom in each case is taking the most financial risk:

Cash bond. You assume full financial responsibility when you post cash bail with the court. If the defendant didn’t appear in court, the court would consider the bail forfeited. If this happens, you’ll lose all of the money you paid to get the defendant out of jail. If, on the other hand, everything goes perfectly and the case is successfully concluded, you will be reimbursed. 

Surety bond: A surety bond is a financial guarantee. When a bond business files a surety bond with the court, you and the bond company assume financial risk. The bond business has the right to track down the offender and return them to police custody if the defendant didn’t appear in court. If this happens, the bond firm will not lose money, and you will receive your collateral back. However, if the defendant is never found, the court will issue a bench warrant for their arrest. As a result, the bond business will lose the money they put up, and any collateral you offered to secure the bond will be lost as well. Again, to reiterate, in New Hampshire surety bonds are technically allowed by statute but are rarely, if ever, issued any more, and there may not be any more bail bonds company operating in the state.

Do have questions on whether you need a cash and corporate surety bond? If you need help with a criminal case, reach out to our experienced criminal defense team.

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This post was written by Cohen and Winters

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