court surety bond
Release Attachment Bond
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What is a Release Attachment Surety Bond?
When a creditor (plaintiff) posts an Attachment Bond to seize the money or property of a debtor (defendant), the defendant may secure a Release Attachment Bond to regain possession of his or her property or money. But the debtor must provide a guarantee that the debt would still be paid should the court’s decision favor the creditor.
In civil court cases, a Release Attachment Bond is allowed by the court to a defendant to counter an Attachment Bond purchased by a plaintiff. A Release Attachment Bond is typically used in cases involving money owed by a party (the debtor) to another party (the creditor). An Attachment Bond allows a creditor to legally seize money or property in anticipation of a favorable ruling. The Attachment Bond guarantees that the creditor will be paid by the debtor.
However, the debtor can counter this move by buying a Release Attachment Bond and ask the court to release the attached property or money back to him or her. But while the debtor regains possession of the property, he or she must ensure that the debt would still be paid in the event that the court rules in favor of the creditor.
Once a creditor has obtained an Attachment Bond, the legal recourse available to a debtor is to purchase a Release Attachment Bond from a surety firm to regain possession of the seized property or money. The surety will then carefully review the case as well as the financial capability of the debtor before writing the bond.
Issuing the Release Attachment Bond is essentially giving the court a guarantee that the debtor has the financial capability to pay the judgment. The surety is also telling the court that it is willing to back that claim with its own funds.
Purpose of Release Attachment Bond
A Release Attachment Bond is the best defense by a defendant to regain control of his money or property. It legally cancels a creditor’s legal maneuver to have his property attached to the litigation and provide the creditor security about his claim until the court issues a final ruling on the dispute.
This type of bond provides a guarantee to the creditor when the court ruled in favor of the plaintiff. However, the guarantee varies depending on the state. In some states, the Release Attachment Bond guarantees that the property or its monetary equivalent will be available to settle the judgment. However, in other states, the bond provides a payment guarantee to the creditor of the judgment, but also includes interests and costs, regardless of the value of the property. The creditor also enjoys the right to sue the surety in his or her own name.
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What is the cost of a Release Attachment Bond?
Each state has its unique rules to determine the amount of coverage for a Release Attachment Bond. It will also depend on the amount of money owed by the debtor to the creditor.
Surety firms will compute the bond premium (the amount you pay to the surety for the bond) based on a total percentage of the total bond amount. Applicants with a good credit score or those with over 700 rating, can enjoy a lower rate, or between 1 and 4%. Those with an unfavorable credit score will have a higher rate.
Sureties are exposed to considerable risk when writing a Release Attachment Bond. One, the property may decline in value during the litigation or the debtor’s assets may not be sufficient to satisfy a judgment for the creditor. Sureties should consider all these risk factors before issuing this type of bond. The prolonged attachment of property creates an additional hazard for the underwriter. It is normal for underwriters to require collateral when writing these types of surety bonds.