What is a Plaintiff‘s-Attachment Bond?
A plaintiff's attachment bond is sometimes simply referred to as an attachment bond. A plaintiff's attachment bond is issued when the plaintiff in a civil case wants to attach property belonging to the defendant as security for a claim made against the defendant. The bond is a guarantee to the defendant that damages will be paid if his or her property was found to be wrongfully taken. A plaintiff may want to attach the property of the defendant if there is reason to believe that the defendant will not pay the judgment.
State laws allow courts to attach a property of the defendant at the request of the plaintiff before a full trial begins. Thus it is called an attachment bond. However, a summary court proceeding must first establish that the plaintiff has legal reasons to request the property attachment before the court will grant the request. The most basic legal ground used by plaintiffs is that the defendant is suspected of planning to defraud the plaintiff by leaving the state or secretly disposing of the disputed property.
In an attachment bond, the plaintiff, or the creditor that requested the attachment of the property, is the Principal. The court is the Obligee. The attachment bond provides guarantee that the creditor (plaintiff) will pay the debtor (defendant) for any damages that the debtor suffered as a result of the attachment if the case is settled for the debtor. If the creditor refuses or fails to pay the damages, the surety must pay debtor. The debtor also has the right to sue the surety in his or her name.
Note: For defendants that wish to counter an Attachment Bond that has been purchased by the plaintiff, the Release Attachment Bond is another type of surety bond that can be purchased by the defendant to retain possession of the assets until the case has been decided by the court.
What documents do I need to obtain an Attachment Bond?
1) Copy of Complaint
2) Copy of Court Order approving the bond.
3) Completed Application
4) Financial Statement (if you are attempting to obtain this bond without collateral)
5) If collateral is required, then a Collateral Agreement is signed.
Do I need collateral to obtain an attachment bond?
It depends. The surety bond company will need to analyze your financial capacity to determine whether collateral is needed. Check out our guide to understanding collateral.
What is the cost of an Attachment Bond?
The court will set the amount of the bond. The premiums (cost to you) will vary depending on the size of the bond. Generally, the premium (cost to you) is 1% of the bond amount for bonds that are fully collateralized. If we can approve the bond without collateral, the costs are higher depending on the risk.
How long does it take to obtain an Attachment Bond?
Each situation is unique. Often, we can issue these bonds in one day. However, we caution our clients not to push deadlines because unexpected situations can occur.
Examples of Attachment
Mark borrowed $1,000 from his friend John on the condition he will pay back after several days. However, Mark has failed to repay the money after several months, prompting John to seek legal remedy and sued Mark to force him to pay him back.
John learned that Mark is planning on leaving the town and move to another state. He also learned that Mark is maintaining a savings account in one of the town’s banks with enough money to cover his loan.
John then petitioned the court to issue a writ of attachment to have Mark’s bank account to be attached to the litigation. After filing the necessary attachment bond and presenting proof Mark that will flee, the court will issue the writ and attach a bank account to cover the judgment in the case of a ruling favorable to John.
Kevin owns a car rental business. When Kevin’s business was hit by a slump in the market, he was forced to borrow some money to a local lender. But Kevin and his creditor encountered some issue about the terms of the loan and the issue was brought in court.
The creditor then petitioned the court to attach Kevin’s vehicles to satisfy the debt, telling the court that he intends to leave the area of the court’s jurisdiction with the vehicle. However, Kevin subsequently won the lawsuit but suffered some losses, mainly lost income from his rental business as a result of the attachment.
The surety is liable to reimburse Kevin for the rental loss if the lender fails to pay for the damages. Kevin can also sue the surety.
George is living a lifestyle he could not afford. His reckless lifestyle sunk him to indebtedness and thus is rendered incapable of paying up his debt.
One of his creditors sued him in court and petitioned to attach George’s house to cover his massive debt. The creditor has found that George is trying to sell the house to cover some of his debts and use some of the money to start a new life somewhere.
After satisfying the court about George’s intention to dispose of the property and leave the area within its jurisdiction, it granted the creditors request of a writ of attachment. The writ effectively ordered the seizure of the house until the final judgment is rendered.
Attachments May Also Serve As Temporary Restraining Order
A court may order a prejudgment writ of attachment after the plaintiff has satisfactorily presented proof of fraud or the defendant is planning to dispose or hide the asset. In essence, a prejudgment writ of attachment also functions in the same way as a temporary restraining order (TRO) because it preserves the status quo pending the court’s final decision on the lawsuit. It guarantees that the seized property is kept to its current pending final resolution of the lawsuit.
But a prejudgment writ of attachment provides financial recovery for the plaintiff. The TRO does not have such a guarantee. However, a prejudgment writ of attachment could be costly. A judge may set the amount of surety bond for a prejudgment writ of attachment up to two times the amount of the damages sought.
If you are in need of an Attachment Bond, or any other type of bond, give us a call at 800-333-7800. Get a Free Quote.