What Is a Court Bond?

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Although bail bonds may spring to mind at the mention of a bond in court proceedings, there are many other types of court bonds. As a component of our judicial system, a court bond adds strength to the legal process by providing accountability. For example, a court bond serves as a promise to pay if someone defaults on a financial obligation or a promise to fulfill a legal duty for certain court-appointed tasks.

What Is a Court Bond?

“Court bond” is an umbrella term for various types of surety bonds that are required in certain court proceedings. Broadly defined, surety bonds act as security for payments or obligations. Some types of non-court surety bonds, for example, facilitate business transactions by guaranteeing the work or services that a company performs for its client.

Other types of surety bonds are commonly called court bonds because of their association with court cases. Sometimes, court bonds are paid to a court by surety companies on behalf of another party to guarantee the party’s liability for a debt or default. Another type of court bond guarantees that a party carries out its court-ordered obligation, for example, fulfilling its duty to act ethically and legally as a court-appointed guardian.

Types of Court Bonds

Generally speaking, there are two primary types of court bonds. Some types of court bonds, known as judicial bonds, require the payment of money, such as bail bonds. Other types of court bonds, such as probate/fiduciary bonds, require the promise of performance. Judicial bonds are used in civil and criminal court cases, and probate bonds are used by specialized divisions within civil court. Because judicial bonds typically mitigate greater financial risks than other types of court bonds, they are more difficult to obtain.

Three-Party Court Bonds

Judicial bonds essentially are contracts between three parties. One party issues the court bond (the surety) to guarantee the obligations or performance of a second party (the principal) to a third party (the obligee). A principal, for example, may be a person appearing in court for violating a law. The obligee is the court, and the surety is the bond underwriter such as a bail bondsman.

How Bail Bonds Work

A bail bond is a type of court bond, specifically a judicial bond. Although some people use the terms bail vs. bond interchangeably, these are actually two discrete concepts. The bail bond process begins when a judge sets the amount of bail for a defendant, which allows the defendant to be released from jail until he shows up for his hearing.

If an inmate doesn’t have the amount of money required to satisfy his bail, he can contract a bail bondsman to pay the money on his behalf. In return, the defendant pays the bondsman a fee. If the defendant fails to appear for his court hearing, the amount of bail is paid to the court.

Court Cost Bonds

A court cost bond ensures that a plaintiff pays her court expenses. This type of bond typically is required from plaintiffs who file a lawsuit in a state different from the one in which they live, although some states may require cost bonds from state residents. Court cost bonds cover litigation expenses, including attorney fees, paralegal fees, court fees, deposition fees and private investigation fees. If a plaintiff fails to pay her litigation expenses, the court can lay claim against her court cost bond.

Court Appeal Bond

An appeal bond, also called a supersedeas bond, is a specialized type of court bond that’s used in civil cases. When a defendant loses a case but wishes to appeal the ruling to a higher court, he may obtain an appeal bond. This appeal bond allows the defendant to hold off paying the judgment ordered by the lower court until the higher court hears the appeal and renders a verdict. If the higher court denies the appeal, the appeal bond guarantees the payment of the original judgment.

Plaintiff’s Attachment Bonds

When a debtor (the defendant) owes money to a creditor (the plaintiff), the plaintiff may petition the court to be allowed to seize and hold the defendant’s property as security for the claim. An attachment bond “attaches” the property to the claim and guarantees that the plaintiff will pay damages if the defendant’s property is wrongfully taken.

Read More: What Is a Split Bail Bond?

Custodian or Guardianship Bonds

When a person is appointed as custodian for the care of a person and/or the person’s finances, a custodian bond or guardianship bond ensures that the appointee lawfully and carefully follows the court order to act in the best interest of an incapacitated person. Custodian and guardianship bonds address the care of minors, disabled persons or elderly persons.

Administrator and Executor Bonds

In the absence of a will, the court appoints an estate administrator for the deceased. An administrator bond protects the court-appointed administrator.

If a deceased person had a will, the probate court may require an executor bond that protects the executor during his management of the estate. Among other tasks, executors are responsible for protecting and disbursing estate assets, notifying beneficiaries and possible heirs, appraising the estate, and paying estate debts and taxes. An executor bond gives heirs, family members and other estate stakeholders legal recourse if the executor mismanages the affairs of the estate.

Bankruptcy Trustee Bonds

When a court appoints a trustee to oversee and administer a bankruptcy case, a bankruptcy trustee bond holds the trustee accountable for fulfilling her court-ordered duties to the creditors. It’s up to the discretion of the bankruptcy court whether to require a trustee bond. Bankruptcy trustee bond types include those for Chapters 7, 11, 12 and 13 bankruptcies.

Court Injunction Bonds

A court may issue an injunction against a defendant, which is a court order that requires the defendant to perform a specific action or cease from performing a specific action. If, however, a court later rules that the injunction should not have been issued, an injunction bond gives the defendant recourse to recoup any losses from the plaintiff that she may have suffered.

The defendant must file a claim against the injunction bond, and, if the claim is deemed valid, she recoups her losses from the surety company that issued the bond. The surety company then seeks reimbursement for the claim it paid the defendant from the plaintiff.

Receiver or Receivership Bonds

When an individual’s assets or company’s assets and operations go into receivership, this means that a court has appointed a trustee to act as custodian of the assets or operations. The goal typically is not to withhold the assets and operators on a permanent basis, but rather to be able to return the assets and operations to the individual or company at some point to avoid bankruptcy.

A receiver bond holds the trustee accountable for ethically managing the assets and upholding court-ordered responsibilities. Plaintiffs may recover their losses through receiver bonds from judgments against receivers who fail in their duties.