Bail Bonds vs. Loans (A Vast Difference)

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“Well, a Bail Bond is sort of like a loan…. Right?”

No. A bail bond is no more a loan than a bicycle is an airplane. Both are forms of transportation. But neither closely resemble one another. A bail bond contract consists of a surety company assuming liability which may not be affordable or desirable to the individual charged (referred to as the principal or defendant). It is in no way, a loan which occurs when a lender loans money to a borrower under terms of repayment. The lender profits from the interest charged on the principle balance which is often secured by collateral.

Like a loan, a bail bond typically consists of parties to the contract, co-signers, collateral and sometimes interest on the premium paid. Yet it is vastly different from a conventional or unconventional loan. For instance, there is no money actually being borrowed. The surety company is only liable to the court. Aside from the possibility of some processing fees, there is no money being paid on the principal’s behalf to any entity whatsoever unless the bond is forfeited to the court.

Instead of viewing a bail bond as a loan, we must understand it to be a matter of liability. Much like your home, vehicle and / or life insurance policies, a bail bond assumes the liability of a dollar amount guaranteeing the principal will appear in court. If they do not appear, the surety agent, by virtue of civil contract retains the right to return the defendant to the custody of the sheriff of the jurisdictional county. If he or she is unable to do so, the court can order the bond amount be forfeited or they can order the surety agent to pay the extradition costs of transporting and housing the defendant if he or she is incarcerated in another state or county.

For assuming that risk, surety agents often charge a 10% premium of the full amount of the bond. Now, here’s where it gets tricky. Bail Bondsmen, especially as the market has become more and more competitive, have begun to finance much more than in past years. With financing, some surety companies charge interest on the amount financed. This is where someone may get the impression that they are paying a sort of loan. However, it is no different from any insurance premium. Generally, if you pay your insurance premium annually, you get a better rate than if you pay it month to month.

Nicholas Bail Bonds does not charge interest on our financing. We never have, simply because I don’t necessarily think it is fair to charge interest on something I am not loaning. If I choose to finance someone, that is my choice and I feel, not charging interest is an incentive to use my services if needed. I would rather them come back to me if they need me rather than feel like I somehow “got over on them”. Many times, a client that trusts you is a client that you can actually help set on a better path in life.

So, if you are a bail agent reading this, the next time someone asks you to explain what you do for a living, stay away from the word, “loan”. We have enough with which to contend. The last thing we need is to be thrown in with a pool of loan sharks… especially when that isn’t even what we do.

You are a professional who manages risk and provides assurance of appearance of defendants in criminal court. We are the good guys! We make sure the people charged with offenses, appear and when they don’t, we make sure the taxpayer doesn’t foot the bill!.

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Bail Bonds… “You mean like, Dog?”

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The above title describes what far too many bail bond agents hear from the general public and precisely what so many courts and government agencies fear when they are not up to date with what it is a bail bond agent actually does. The reality television show that broke into the spotlight during the last 10 years has been something that many of us are constantly combating. I cannot tell you how many times I have been asked what I do for a living and had this all too common conversation….

So, what do you do for a living?

I am a bail bondsman.

Oh wow! So you’re like that ‘Dog the Bounty Hunter guy’!

No…. That is about as far from reality as one can get….

Maybe I should just go with it, I think sometimes… Obviously the characters that these people portray have gained them notoriety at some level. One would likely presume that they are doing quite well with their finances due to their success at portraying the bail bondsman as some 1980’s silver-screen cowboy. But I soon realize that we are in a professional industry and as our courts evolve; as demand changes, so must we….

Nobody likes change. I for one hate it because it forces me to produce better results in a foreign environment. I like the way I do things and I don’t want to do them different. However, the fact remains that when the world is changing around us, we can either shape up to our surroundings or the ever-changing climate will soon ship us out. Anyone who owns a business and doesn’t understand this concept as fact, has either been in business less than five years or would do well investing in job applications rather than entrepreneurship.

I’m not here to attack these reality television stars personally. They made their way doing whatever it is that they do. What I am here to say….. What the majority of our industry is here to say is that the reality television show does not portray our industry at all. Much like “Law and Order” doesn’t provide an accurate picture of a trial court and “C.S.I” doesn’t mean that law enforcement can find you immediately with the stroke of a few keys in their elaborate state of the art crime lab with holographic technology, the bail bondsman is rarely a flamboyant cowboy on a mission from “God” to capture the dangerous criminal who is evading prosecution. It’s simply not that interesting or exciting.

You have heard me say what we are not. Let me tell you just a bit of what we are. Contrary to popular belief, we cannot get you out of jail. Only you can do that by agreeing to the conditions of your release which are set by a judge. You enter the agreement and we enforce your end of the bargain. If you don’t meet your end and we fail to meet ours, we are financially at risk. We must be available 24 hours a day. Holidays are not exempt. In fact, they can be some of our busiest times. We must balance our judgement calls with a risk assessment like no other. If we refuse to “get you out”, we could easily hurt our business. If we do “get you out”, you could hurt our business. We cannot make decisions based on race, religion, sexual preference or anything of the sort or we risk losing an entire demographic as a customer base.

Attorneys despise us prior to preliminary hearings because we were usually paid first and they love us during your plea process because we keep you in court and your case moving quickly. We cannot go grocery shopping without being bombarded with “why we shouldn’t get your boyfriend out” and we can’t go to the bar for a drink without being expected to spill the “secret” on how to beat a DWI. We are marriage counselors, finance experts, mediators, detectives, experts at riding the fence between law enforcement credibility and “street” credibility. Our life savings is what we risk for your chance at freedom, for your chance to appear before your accuser in a suit rather than a jumpsuit.

We have to keep up with you. Sometimes we have to act like we care when we do not. But the ones of us that are good, do care. We care because we work with you everyday. We care because we want to believe in something good just like the rest of the free world does. We would want justice ourselves and every time we walk through the door of that jail we understand something that few do. We understand that it isn’t just the skid roe drunks in there. It isn’t full of low life scum. They are just people. They are people who are accused of committing a crime. We have seen teachers, preachers and even law enforcement behind those bars and we know that everyone is susceptible to making mistakes.

The judge or a jury of your peers makes the judgment call. We just make sure you are there to hear it.