Court bonds are bonds that the court requires you to obtain. They are often required for civil proceedings. There are a variety of different types of court bonds, from appeal bonds to attachment bonds; however, the application process has some similarities across all court bond types.
#1 A Credit Check Is Required
When you submit an application for a court bond, you'll undergo a credit check. The credit check will be ran to determine if you are financially responsible. You have a higher chance of getting the bond you need at an affordable rate if you have a high credit score.
If you have a low credit score, you may still be able to get the court bond you need, but you are going to face much higher rates and fees. This is done to reduce the risk to the company that is providing you with the bond since you do not have a track record of making good financial decisions.
#2 Collateral May Be Necessary
If you are required by the court to obtain a judicial bond, you are going to need to need collateral. Collateral is a way of showing that you can pay for the bond if it ended up being necessary. Depending on the size of the bond that you obtained, the collateral could be a small sum of money, or it could be something with a much larger value, such as your vehicle, house or business.
Collateral does not take away your premium. It is an additional financial assurance that the bond company may require you to provide in addition to the premium you'll have to pay in order to obtain the bond.
#3 A Co-Signer May Be Necessary
Bond companies want to know that they are going to get the money they need from you if they have to actually pay out your bond. Because of this, many bond companies will require you to have a co-signer on the bond, even if you have an average or good credit score. Bond companies do this to reduce their risk and ensure that they have more than one party to pursue for future payment if your bond ends up being used.
Make sure that you find someone with solid credit to be your co-signer. Also, make sure that they understand the financial risk that they are taking on. They are obligated to pay the bond company if it ends up being paid out if you are not able to meet that financial obligation.
For more information about court bonds, talk to an agent at businesses like Service Insurance Company.Share