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Risky Business

Bail Bonds are Risky Business

A bail bondsman is in the business of taking risks. He or she chooses to financially vouch for the character of an alleged criminal. Bail bonds are an amount of money determined by the courts according to the type or particular crime allegedly committed. Bail bonds represent an agreement between the bond agent and the defendant (alleged criminal) and his or her family or friends that the defendant will return for their impending day in court.

Bail amounts are set by the court. Bail bonds represent the criminal activity of a particular jurisdiction and the courts that reside therein. There are several factors which can also affect the adjustment to amounts on an individual basis according to the state. The severity of crime committed separates bail in the hundreds from that in the hundred thousands. Further, the presence of pre-existing prosecutions or concurrent charges will affect the possibility and amounts of bail set. Lastly, the likelihood of flight risk is of constant concern for the courts, prosecutors and bail bondsman who offer and pay the amount. Even after bail payment there is still the risk of the defendant not showing up. This is when the bond agent looses their risked money. So why do it? What is there to get out of it, from the bond agent’s perspective?

Bail bonds have factors similar to that of a loan. All participating state’s bail bondsman receive a type of guarantor fee, known as a premium, of predominantly 10 to 15 percent of the bail amount, on top of the bail for each bond granted. The lending is determined by credit worthiness. When the defendant is not able to receive the funds with his or her own credit this is when friends step in to act as co-signers applying their good credit to secure the bond. Yet, the defendant’s and the defendant’s family’s credit are not the only means of convincing the local bail bondsman of one’s financial worthiness of the risk. Collateral is often used as a means of surety for the bail payment. The defendant or his or her relatives may use expensive personal property such as car deeds, real estate deeds of trust, homeowner’s warranty, or jewelry as such a means of collateral.

In the financial investment area of business it is quite often quoted that “the greater the risk, the greater the return.” However, a bail bondsman is not investing in a lucrative business venture, the bond agent is investing in a defendant’s character to show up and face the crimes for which he or she is being charged. Insofar as any benefits to the agent, the defendant’s bond is only allowed by state to receive a premium between 10 and 15 percent of the bail amount. Once the defendant’s court date arrives, and he or she meets the appointment Business Management Articles, the bail is returned to the bond agent. The defendant has merely paid for time with credit or collateral.