Few things are more shocking than getting a phone call in the middle of the night letting you know that a family member has been arrested and needs your help to get out of jail. No one plans on having to help someone with bail and this is especially true when it comes to financial matters. Depending on the reason for the arrest, a bail bond can be expensive and require a significant amount of money up front.
If you work with a bail bondsman, they will charge a premium in exchange for agreeing to pay the entire amount of the bond. This amount is determined as a percentage of the total bond amount. In most states, this percentage is set by regulations. For example, in California, bail bondsman must set the premium at 10 percent of the total bond amount.
Bondsmen are not allowed to charge more than this and cannot give a “discount” to clients.
So what do you do if you need to secure a bond but don’t have the cash on hand to pay the premium? One answer is to use collateral.
This is essentially giving control of a physical asset to a bondsman as assurance that the person who is receiving the bond will make all of their court dates and fulfill all of their legal obligations.
Certain providers of professional bail bond services will accept collateral in lieu of monetary payment to cover the cost of a bail bond premium. In addition, a judge might also allow the court to accept collateral instead of money to cover bail if you are working directly with the court system to arrange for bail.
If you are working with a bondsman and want to use collateral instead of cash, it will be up to the bondsman to determine what is acceptable as collateral. As a general rule, bondsman will prefer to receive something that has a value that is at least 150 percent of the total value of the bond. This reason for this is that if a person skips bail, the bondsman needs to be able to sell the item put up as collateral to cover his lost bond and also cover his time and effort in selling the collateral item.
What kinds of items can be presented as collateral? Again, it’s up to the bond agent but almost anything that has value can be used. The most common items used as collateral are:
Property (such as a house)
In these cases, the bondsman will ask you to place the pink slip or deed in their trust. This doesn’t give them ownership but allows them to gain ownership of the item if the bond agreement is broken. Smaller items such as jewelry, art or collectables can also be used as collateral; in these cases, the bondsman may ask to physically keep the item until the relevant court case comes to a conclusion.
Using collateral to cover the costs of a bail bond can be extremely beneficial if you need help and can’t afford to pay a premium. However, the consequences can be severe if the person you are helping out breaks the bond agreement.