14 Mar

Understanding Bail Bonds

To understand what are bail bonds one must first grasp the concept of a bail. A bail is money someone has to put up as an assurance to court or a judge that they will comply with courts decisions and return for any further hearing as the judge has ordered. The court will hold up this bail money till the entire hearing procedure is complete and the court is convinced that the defendant has complied with all the requirements.

The amount of money depends on the severity of alleged crime, suspects previous criminal record, the danger that the release of suspect may pose to the public and the suspects ties and friendships in the community and surroundings.

The amount of bail money can range from a really low amount to massive amounts that might be un-affordable for some people. In such a case the accused has the option of staying in jail till the net date or be released into public by paying bail money or submitting bail bond.

Bail bond is an assurance or guarantee that allows a person who is accused of having committed a crime to stay out of police custody while their case is yet not finalized and the defendant is awaiting either a judgement of conviction or acquittal. The defendant is assigned a bail bond by a bail bondsman. The bails bondsman ensures it to the court, as a written agreement, that the accused will attend the hearing on time and that in case of his absence on the due date the complete bail money will be submitted to court by the bail bond agent.

A bail bonds man charges the defendant a non-refundable percentage of the bail amount in return for guaranteeing the court his return and compliance. This percentage is usually around 10% of the bail money but an agent my charge more and may also insist that the client put up some property as collateral to secure the bond. In some case to ensure that the accused does not flee, the bails bond company looks for friends and family members to act as indemnity, who will then be liable for the bail money if the defendant does not appear on time.

It is through this non-refundable percentage that a bails bonds company makes its earning. The take up a percentage for the risk they take in being the guarantors of a dependent. Of course, there is risk involved, in case the defendant tries to flee, the bails bond agency may assign bounty hunters to track such defendants and bring them to court. The bail bond company is legally empowered to carry out this hunt and bring the accused to justice. In the rare case the accused manages to hide or flee successfully, the bails bond company is liable to pay the complete bail amount to the court. In such a situation, the collateral and indemnity come into play too and may be used against the accused.

If one is to setup a bails bond company, he must ensure he understands the laws of the state he plans on operating in and has the complete paperwork, licenses and registration requirements sorted out. It is important to have some form of Insurance for the company too. The next steps should be to locate the office at ideal locations and advertise sufficiently to gain a good clientele. And very importantly have a system setup to catch any fleeing accusers or clients, perhaps by hiring bounty hunters, to help minimize the risk involved in running such a business.

When setting up a bails bond company it is important to consider that the laws regarding bails bond system having been under discussion in many states and there has been some criticism of such a system that forces the poor to stay in jail while allowing others to roam free creating a sense of discrimination (to get more treatment on this, go here: https://legaldesire.com/how-do-24-hour-bail-bonds-work/. If such a law is passed that renders a bail bond system obsolete, the bail bonds companies will also go out of business completely.

On the contrary, it is to be noted that the bails bond industry has been very profitable too, according to some reports the industry brings in around 2 billion dollars in profit per year. So, if you have understood all the risks involved and have a clear plan on aiming reasonable clientele, bail bond companies can be quite profitable.

13 Mar

Are Bail Bonds Fair Today?

For those who are new to the term ‘bail bond’, here is what you need to know about bail bonds. In short, it is a surety bond that acts as a safety net for defendants, allowing them to be released from jail until their trial dates. In the event that the defendant is unable to pay the bail amount set by the court, they will usually seek help from a bail bondsman. On the basis the defendant pays 10% of the bail amount, the bail bondsman will secure the other 90%, normally in the from of a collateral. In the event that the defendant does not appear for their trial dates, the remaining 90% will need to be paid. However, if the defendant attends as promised, the bail bond is then dissolved. The bail bondsman will keep his 10% cut.

It is important to understand that while Bail Bonds are only practiced in the US and Philippines, each state has its own bail bond system. In some states, such as Kentucky, commercial bail bonding has been completely banned. The bail bond systems biggest criticism in recent times, is its discriminatory nature towards the lower income households in the US. Thousands of people are held in jail because they cannot afford to scrape together 10% of their bail amount – this will depend on the size of the bail, which is set at the judge’s discretion, but the same principle applies across the board. Has this had a negative impact on the already problematic mass poverty levels across the states? It’s difficult to measure, but there are arguments for both sides here.

From an underwriter’s perspective, bail bonds are very risky, and become increasingly risky based on the following factors: creditworthiness, personal and family life. The size of the bail and severity of crime will also impact the decision of a prudent insurer. Please note, while it could be argued a bail bondsman provides security and surety to a defendant until their trial date, they are incentivized by the profits for successful cases. Therefore, it’s unlikely that a bail bondsman will be available for minor crimes, where profitability potential doesn’t exceed $10 or $20. This means that there is an increasing amount spent on jail fees to hold defendants who have committed minor crimes, rather than those who have committed higher crimes and have higher bail amounts.

So what’s the big deal with leaving a loved one behind bars? A defendant, whether guilty or not, will have family and loved ones most of the time. Holding a defendant in jail if they or their family cannot afford to pay 10% (or 15% in some cases) of the bail amount, could have a negative effect on their mental and physical well-being. I’m sure you’ll agree that it seems ‘unfair’ for a bail bondsman to retain 10% of the premium in the event the defendant is proven not guilty. This could lead to relatives being forced to turn to loans as a solution to pay down the original 10%, deepening the already alarming debt and poverty levels across the US. From summer 2018, tech giants Facebook and Google banned the advertisements of bail bonds, as they stated it is an exploitative industry, preying on low-income households. On any given day, in the US, approximately two-thirds of people in local jails are awaiting trials, because they can’t afford to pay their bail or pay 10% of their bail to a bail bondsman.

There are positives to the bail bonds system. After all, would it still exist in some states if it were not deemed effective? In theory, the bail is designed to mitigate the risk of a criminal failing to show up to court hearings, and ultimately evading the legal process. A bail bond allows the defendant some ‘breathing space’, and provides a level of certainty for the court, in that they are covered (by the bail amount) in the event the defendant does not appear on the required date.

What does the future hold? Is a more suitable system the pre-trial justice system? This could kick start the end to poverty in the US. It might be time for the remaining states to abolish the bail bond system, which pushes many into crippling debt, and leaves low income criminals, whether innocent or guilty, held in jails purely due to lack of funding.