If an appeal or “stay” of judgment request is later denied, an appeal bond is intended to ensure payment of judgments. The court system requires appeal bonds to provide safe payment to the courts.
An appeal bond can help a person avoid paying the full cost of a case if they are most likely to lose or appear to be “dragging their feet” in the system.
This kind of bond aids in preventing abuse of the judicial “appeal” system. It guarantees that a person will be held financially accountable for paying any debts or fines incurred during a legal proceeding.
What is an Appeal Bond?
The purpose of an appeal bond is to shield the court from pointless appeals that could waste time and money. When a defendant files an appeal of a court’s decision, they must post the Appeal Bond. The bond enables the plaintiff to postpone payment of a judgment until the outcome of the appeal. Although interest might be included, the bond amount is typically equal to the amount of the judgment. While an appeal is being decided, the bond must be in force.
What Makes an Appeal Bond Necessary?
You will typically need appeal bonds if you want to delay paying a money judgment until the appeal is resolved. Appeal bonds discourage people who lose cases from filing pointless appeals and keep the appellate system from being abused. For instance, without an appeal bond, a party could file an appeal to delay paying a court-ordered amount. If the appeal is unsuccessful, an appeal bond guarantees the responsible party will pay the amount ordered by the court.
How Does an Appeal Surety Bond Work?
Like other surety bond types, appeal bonds essentially promise that you will fulfill any pending financial or legal obligations. You need a bond to ensure you will honor judgments rendered against you in this situation. The court can claim the bond if you don’t make payments. After looking into the claim, the surety company that issued the bond will pay the court what you owe using the collateral you typically had to offer when applying for the bond if they find it valid.
What Purposes Does an Appeal Bond Serve?
A surety or “appeal bond” aims to guard against pointless appeals and shield the courts and bonding companies. Before filing an appeal of the judgment, you should obtain a bond because you might later have your appeal dismissed or have to pay additional court fees.
By obtaining a bond, you can be sure that the case will be paid for even if you lose one or more lawsuits that the person(s) or company has brought against you. The surety bond would safeguard everyone involved from the default of payment, regardless of whether a claimant filed for bankruptcy or tried to avoid judgment costs in other ways.
A surety or appeal bond pays for the court’s expenses and the parties’ compensation.
How Much Does an Appeal Surety Bond Cost?
The amount of the judgment you are appealing matches the size of your appeal bond exactly. However, only a small portion of the total, typically around 2%, goes toward the bond’s actual cost. That implies that a $50,000 bond premium may only cost $1,000.
However, the bonds associated with that case typically need to be collateralized, which means you have to put up collateral (cash or property) equal to the bond’s value due to the low likelihood of success in the case of an appeal. The bond cost is determined less by your credit history than by the specifics of your appeal because you must demonstrate that you can pay the entire amount upfront.
Requirements for Obligee and Bonding
Every person who appeals must be bonded, according to the court. According to the bonding requirements, the person won’t file an unnecessary appeal or misuse the system. These bonds are necessary for both state and federal courts.
Before requesting a bond, the principal should be made aware of all requirements. The surety company will pay for all paid claims if the principal violates the bond terms and a claim is made; the principal will then be required to reimburse the surety for all payments made. As a result, it’s common for the surety to demand 100% collateral to support an appeal bond.
Can Someone With Bad Credit Obtain an Appeal Bond?
Credit matters less when comparing appeal bonds to other surety bond types. It doesn’t matter how your credit score and financial history look as long as you can provide the necessary collateral.
Credit is only sometimes taken into account. Some surety companies may view Those with terrible credit as an unacceptable risk. Horton Group offers a special program for bond applicants with poor credit, so we can quickly and easily help you meet surety bond requirements regardless of your credit situation.
Does a Surety Bond for an Appeal Need to Be Renewed?
Some surety bonds have a coverage term, such as a year, after which the coverage expires unless it is renewed. Both appeal surety bonds and most other judicial bonds are an exception to this rule.
Coverage begins once the surety bond premium is paid, the necessary collateral has been put up, and it continues to be in effect throughout the appeals process. Regeneration, therefore, has no bearing.
However, the filing of claims against an appeal bond should be noted as it may make it more challenging to obtain one of these bonds (or any other kind of surety bond) in the future. This is particularly true when a claim is settled by the surety and the principal fails to repay the debt.
Where Can I Obtain an Appeal Bond?
To obtain an appeal bond, you must complete the following.
- Consult an attorney. Because they are not always required as part of the appellate process, ask your attorney if an appeal bond is necessary.
- Establish the bond’s value. Most states demand that the bond pay for both the judgment and the costs and interest for the appeal. Your attorney should be able to ascertain the precise bond sum required to satisfy the appellate court’s requirements.
- Speak with a provider of surety. Our surety bond specialist will walk you through the appeal bond application process if you call or use our website to apply for an appeal bond.
If someone files an appeal, they have a lot riding on the court, giving their case another look. However, such a procedure necessitates obtaining an appeal bond first, making the bonding process a minor but crucial requirement. Not just any surety company should be relied upon to assist you. One that makes getting a bond as quick, simple, and affordable as possible is the one you should rely on.
A surety company that fights for you by delaying a settlement until after conducting a fair and in-depth investigation into the claim is one that you should work with. People across the nation are searching for appeal surety bonds because choosing a surety agency is essential.
- https://www.investopedia.com/terms/c/collateral.asp#:~:text=Collateral%20is%20an%20item%20of,it%20to%20recoup%20its%20losses.
- https://www.dol.gov/agencies/olms/compliance-assistance/tip/bonding-requirements
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.
