A Deeper Understanding of Bail Bonds

Although most people have heard of bail bonds, when faced with unexpectadly having to obtain one, they may find they have little knowledge of how bail bonds work. The bail bond process overall can be very simple. You pay 10% of whatever the total bail amount is to the bail bond company. The bail bond company posts a bail bond for the full amount of the bail with the jail. The person you bailed out makes all of their court appearances and when the case is over, the bail bond company sends you a notice letting you know you are no longer financially responsible for the bail bond.

For most of the people we post bonds for, it remains a fairly simple process without any complications. When something does come up, you want to make sure you have knowledgeable bail bond professionals available to help you. The other important thing to note is bail bond companies have different ways of handling common situations that may occur. The way these situations are handled can mean the difference in whether or not you have to pay additional money or whether or not the person you bailed out gets to remain free on bond. These situations can be somewhat complicated to explain and you may never have to deal with them but it is better to at least have some knowledge about them and the different ways they are handled.

I will address these situations in separate entries. To clarify, these are things that may come up after you have paid the money to the bail bondsman and your friend or loved one is out on bail. It is important to know, the premium you pay for the bail bond is fully earned upon the release of the person you had the bond posted for. If he or she walked out of the jail and got arrested just outside the jail, you would not be entitled to a refund. This rarely happens but it can. This would apply whether the person was out on the bond for one second or one year, the premium is fully earned and you do not get a penny of it back. Most agents these days are pretty good about explaining this to people. Even so, there is still confusion about the premium. Some people call up thinking the cost for the bond is going to be 10% of the 10%. Usually they are calling on a large bond, say $100,000 or more. Or we will explain that the cost for the bail bond is going to be $10,000 (on a $100,000 bond). We will explain it a few different ways. Then they will ask, "what do we pay you?". Other people are under the assumption they just have to give us something for collateral. They call up wanting to know if we can use their car for collateral. When that is the first question people ask, I find out how much the bail is and explain how much the cost for the bail bond will be. I explain to them the two parts of a bail bond, the premium and the collateral.

Bail Bonds: The "Chain of Liability" and what it means to you

When you sign a bail bond agreement, you are signing to be financially responsible for the person you are bailing out to make all of their required court appearances until the bond is exonerated. If that person fails to appear, most contracts state the bail bond company can demand that you deposit the full amount of the bail with their company right away. If the person is not found within the timeline allowed by the court, you will be required to pay the full amount of the bail PLUS any costs incurred while trying to find the defendant. If you have deposited collateral with the bail bond company, they will send you a demand for the money and/or take action against whatever collateral they are holding to recover their money. If there is no collateral, the bail bond company can sue you in a court of law to recover the money they had to pay the court and also any expenses they can document they incurred while trying to search for the defendant.

People often mistakenly think that the insurance company who supplies the bail bonds to the bail bond company will pay the court if the bond goes bad. This simply is not true. Where the "insurance" part comes in is to the County the bond was written in and to the State of California. If the bail bond company fails to meet their financial obligation to pay the court in regards to a bail bond forfeiture, the insurance company is next in line to pay that bail bond forfeiture. If the insurance company DOES NOT pay the bail bond forfeiture, their bail bonds will no longer be accepted in that county until that forfeiture is paid in full.

Bail agents don't usually let the situation get to the point where their insurance company has to step in and pay the bail bond forfeiture. At least not ones that want to stay in business for very long. Insurance companies usually hold collateral in the form of assets that belong to the bail agent. The collateral can be a lien on one or more properties and/or cash. Typically, bail agents pay a small percentage of each bond they write into what is called a "build up fund". This is money the insurance company holds onto for the bail agent in case they do get a forfeiture and it has to be paid to the court. It's sort of a forced savings account.

So if you talk to a bail bond company and they ask you for collateral, they are not asking you to do anything they haven't already done themselves. YOU know the person you are bailing out is going to make all of their court appearances, right? This will lead into a whole other discussion which I will address in another post.

I know he's going to have to serve time. Is there any reason I should spend the money to bail him out?

Some things to consider when trying to decide

When we get a call to bail someone out of jail, there is so much about that person, their life, their family and their situation that we don't know, there is no possible way we can make decisions for you about whether or not they should stay in jail or be bailed out in most situations.

Every situation is different. When we can offer some sort of opinion, we will. We can never give legal advice and won't try to but we will try to be as helpful as we can. So for example, if someone calls and wants to know if they should spend the money to bail the person out if she knows he is going to serve time. The first thing to consider would be does she have the money? Can she afford to spend it and if so how much of a hardship will it be? How much is the bail? Is there enough money for both bail and an attorney? If not, are they okay with just a public defender or should all of the money go towards an attorney instead of bail? Do they really want to do both? If so, we can discuss payment arrangements so they will have money for an attorney. Is he going to fight the case? If so, how long is it expected to go on? Some criminal cases can go on for a year or more. How much time will he serve? If it is going to be a long time, he may want out before he is sentenced so he can get his affairs in order.

What happens if I get arrested while I am out on bail?

In general, as long as you are bailable and have the means, you can get bailed out. Our company policy is to help people get out of jail whenever we can. This is not true with all bail bond companies.

There are bail bond companies that will surrender your bond if they find out you are in custody. The reason they do this is so you will have to post bail on that same case, AGAIN. Is this legal? Yes. Is this moral, ethical, etc.? We don't judge how other people run their businesses. We just like to make people aware of the different ways things are done.

For example, if you were already out on a $10,000 bail and you got arrested for a new charge and the bail on that was $5,000. We would post a new bond for you and you would only have to pay for the new bond which would be $500.

If you were bailed out by a company that decided to surrender the $10,000 bond, your bail now would be $15,000 instead of just $5,000. This would mean you would have to pay a bail bond premium of $1,500. If the company did surrender the bond, you would have no obligation to do business with them. At that point you could use another company to post the bonds since they are going to make you pay for them all over again.

These are the types of things people don't know about when they are calling bail bond companies. There is no way you would know unless you had been through this situation before.

Beware of Bail Bond Scams by People Without a Bail License

I ran across a newsletter published by the California Department of Consumer Affairs. It has a lot of useful information. I ran across an article about a scam I have heard of before. Con artists pretend to be a family member calling from jail and get the unsuspecting victim to wire them money in someone else's name. This is a scam being run in Northern California. I have heard of this same type of scam in other states as well.

One way a person could check out a story like this is to call the jail where the person is supposedly located. You can call yourself or ask a bail bond company to call for you. All of their ads say free bail information, take them up on it. They should be happy to help. If the person can't be found in custody, you may try calling them at home or on their cell phone!

Department of Insurance Info About Bail Bonds

The Department of Insurance is the entity that regulates bail bonds in California. The DOI provides very little information for consumers on the subject of bail bonds.

From the California Department of Insurance Website

http://www.insurance.ca.gov/0100-consumers/0060-information-guides/0060-other-topics/surety-and-bail-bonds.cfm#bail

• Bail Bonds
  Most people are familiar with bail bonds. Someone arrested on a criminal charge may be held until trial, unless they furnish the required bail. The posting of a bail bond acquired by or on behalf of the incarcerated person is one means of meeting the required bail. When a bond is issued, the bonding company guarantees that the defendant will appear in court at a given time and place. The Government entity (state or federal) in whose court the defendant must appear, is protected by the bond. If the defendant fails to appear, the bond amount becomes payable and is forfeited as a penalty by the surety insurer issuing the bond. Bail bonds usually require collateral (cash, a deed, or other property) to protect the surety.
  Bail bonds are issued by licensed "Bail Agents" who specialize in their underwriting and issuance. Bail agents act as the appointed representatives of licensed surety insurance companies.
  
  Frequently Asked Questions
  Q. Who licenses and regulates bail agents?
  A. Bail agents are licensed and regulated by the California Department of Insurance. You can obtain the licensing status of a bail agent by contacting the CDI Consumer Hotline at 1-800-927-4357 or by visiting CDI's Web site at http://www.insurance.ca.gov/index.cfm.
  
  Q. How much does a bail agent charge?
  A. The cost to the consumer will be about 10% of the total amount of the bond, plus actual, necessary and reasonable expenses incurred in connection with the transaction. The court determines the amount of the bond. Each surety company must file rates with the Department of Insurance. Bail agents representing a company must charge the same, filed rates. A "Rate Chart" is required to be posted in a visible location at every bail bond office.
  
  Q. What is the consumer agreeing to in the bail bond contract?
  A. The consumer is agreeing to:
  -Pay the premium for the bond at the established rates.
  -Provide required collateral.
  -Pay actual, necessary and reasonable expenses incurred by the bail agent in connection with the transaction. These may include:
  • Reimbursement for long distance phone calls.
  • Excess travel expenses (described as outside of the bail agent's normal scope of
  business, or into an area where the agent does not advertise).
  • Posting fees (for payment to an agent in another area to physically deliver a bond.
  An agent should not charge a posting fee for the normal delivery of a bond in the
  agent's advertising area).
  • Bounty agent/skip tracer expenses (These are usually based upon the amount of
  the bond).
  • Payment of the bond amount for the defendant's failure to appear.
  • Attorney fees and court costs.
  
• Keep the bail agent advised of address/employment changes of the defendant or other
• parties
  to the agreement.
  
• Aid the bail agent/skip tracers in locating the defendant (where someone other than the
  defendant has secured the bond).
  
• The consumer should read all agreements thoroughly, asking questions until all items and
  obligations are understood.
  
  Q. What does the bail agent do for the consumer?
  A. Provides an avenue for the incarcerated person to be out of custody until his/her day in
  court, allowing the defendant to continue his/her day-to-day life until the criminal matter is
  resolved. The bail agent will provide the following:
  
  -Receipts and copies of all signed documents.
  -Information regarding the status of the bond and changes in assigned court
  dates.
  -The status of any costs due, as imposed by the court.
  -Assistance in locating the defendant should a forfeiture occur.
  -Appearance before the court regarding the bail bond when such appearances
  are necessary (sometimes requiring the hiring of legal counsel).
  -The timely return of collateral upon exoneration of the bond.
  
  Q. How long is a bail bond good for, and can the amount be reduced?
  A. Length of the contract. The bail bond runs for the length of the case that is being bonded. However, the agreement may provide for the payment of premium at inception, and upon "renewal" on an annual basis. Once paid, premium for a bail bond is not refundable.
  Reduction of Responsibility. Although not usually the case, a court may reduce the amount of bail required. If a bail reduction occurs, the bail agreement should be amended to reflect the reduced exposure of the bail agent and surety insurer. A bail reduction does not result in a refund of premium paid, although it may result in a partial return of collateral. If a bail reduction occurs, it should result in a reduced renewal premium. Under any circumstances, where a bail reduction has occurred, the bail agent and insurer cannot recover more than the amount to which they are actually exposed, plus necessary related expenses.
  
  Q. What if I have a problem or dispute with a bail agent, such as a failure to return collateral?
  A. Contact the California Department of Insurance using the information provided in the "Talk to Us" section.

Important things you need to know before you sign a Bail Bond Agreement

When do I get my money back?

There is so much confusion surrounding this part of the bail bond transaction. We explain this to our clients and have them initial our contracts that they understand they don't get the money back. Invariably, a year later, some family member who had nothing to do with paying for the bail bond will call and demand to know why their relative didn't get their money back. We politely explain how it works.

For example, if someone's bail is $10,000 someone you can post $10,000 cash at the jail (some jails accept checks but not credit cards-each jail has different requirements so it is recommended you call ahead if you plan to post the bail yourself). You make the arrangements with the jailer yourself. You will be given the person's first court appearance. After that, it is up to you to keep track of the court dates. If all goes well, the court will usually mail a check 6-8 weeks after the case is over. If the defendant skipped bail and did not return to court, you do not get the money back. You will have "forfeited" the bail money.

If you use the services of a bail bond company, you pay the standard rate of 10% of the bail amount which in this case is $1,000. This is called the premium. The $1,000 premium is non-refundable. Think of it as a loan fee. The bail bond company is loaning you $10,000. Regardless of the outcome of the case, you do not get the $1,000 or any portion of it returned to you.

If you put something up for collateral such as a lien on real estate, cash collateral, a title to a vehicle, etc. You would get the collateral back when the bond is exonerated and the premium is paid in full.

What happens if the person doesn't get bailed out of jail?

Not everyone can make bail and not everyone chooses to get bailed out. For the people who stay in jail, they are usually taken to see a judge within 72 court hours of when they were arrested. Knowing this, law enforcement will often do "sweeps" where they go out and serve warrants on Thursday nights. They do this knowing that if some of the people can't make bail, they will be stuck in jail until the following Monday or Tuesday.

Typically the first court appearance is the arraignment. At the arraignment the following events occur:
1. The defendant is informed of the charges against him or her.
2. The defendant is advised of his or her constitutional rights.
3. If the defendant cannot afford an attorney of his or her own choice, an attorney is appointed by the Court.
4. The defendant enters a plea of guilty, not guilty or no contest.
Not Guilty: The defendant states that he or she did not commit the crime.
Guilty: The defendant admits that he or she committed the crime and is in effect convicted.
No Contest: Also known as "Nolo Contendere." The defendant does not contest the charge. This plea has the same effect as a guilty plea, except that the subsequent conviction cannot be used against the defendant as evidence of liability in a civil suit.

When people call around for bail bonds, they will get information about how much the bail bond costs and what if anything will be needed for collateral. These are the two major concerns when shopping for a bail bond. If all goes well, and with a majority of transactions it does go well, you will be okay just concerning yourself with those two things.