Using Property as Collateral to Post Bail: Is it Wise?

Using Property as Collateral to Post Bail: Is it Wise?

Getting arrested can be a scary, overwhelming experience. The shock of being taken into custody, the confusion of booking and processing, and the uncertainty of what happens next can leave people feeling powerless. One of the first big decisions you may face is whether or not to post bail to get out of jail while your case moves forward. For people without much cash savings, using property as collateral for a bail bond may seem like the only option. But is putting up your house, car, or other assets really wise in the long run? Let’s take a closer look at the pros and cons so you can make an informed decision.

How Using Property for Bail Works

If you don’t have enough cash to cover the full bail amount set by the court, you can use property you own instead. Here’s generally how it works:

• You pay a bail bonds company typically 10-15% of the total bail amount as their non-refundable fee.
• You put up property like your house, car, jewelry, stocks, etc. as collateral to cover the remaining bail money owed.
• The bonds company pays the court the full bail amount on your behalf and you are released from jail.
• If you show up for all court dates and meet bail terms, the property is returned when the case ends.
• If you miss court or violate bail, the bonds company can seize and sell your property to recoup the bail money.

It may sound straightforward, but there’s a lot of fine print and risks involved with bail bonds and property collateral that you need to understand.

The Pros: Reasons People Use Property for Bail

Putting up property as collateral for bail may seem like a quick fix or only choice for some defendants. Here are some of the potential pros:

• Get out of jail faster – Using property can allow you to post bail and be released more quickly than trying to raise cash.
• Avoid paying full bail amount – Only needing 10-15% down can make bail seem more affordable if you lack savings.
• Keep job and take care of responsibilities – Being out of jail makes it easier to keep working and handling obligations.
• Prepare your legal defense – It’s much easier to meet with your lawyer and build your case when you’re not behind bars.
• Avoid risks of jail – Health, safety, and sanitary risks of being incarcerated are avoided.
• Presumption of innocence – Some view paying bail as upholding the principle of innocent until proven guilty.

For people struggling to come up with cash for the full bail amount, the ability to leverage property they already own may feel like the best or only way to secure their freedom quickly. But are the benefits worth the risks?

The Cons: Dangers of Using Property as Collateral

While putting up your assets might seem like an easy call when you’re desperate to get out of jail, it can lead to financial disaster down the road. Here are some major cons to think carefully about:

• High fees – The bonds company’s non-refundable 10-15% fee is expensive, often totaling thousands of dollars.
• Predatory terms – Read all contracts closely as some bonds companies exploit desperate people with unfair small print terms.
• Risk of property loss – Your home, car, or other assets can be seized and sold if you miss court dates or violate bail terms.
• No return on investment – Unlike cash bail where your full amount is returned, you get nothing back from the non-refundable fee you pay.
• Debt and bankruptcy – Some borrow money or rack up credit card debt they can’t afford to pay back in order to post bail.
• Inability to pay restitution – Defendants who lose necessary assets may be unable to pay any fines, fees or victim restitution later on.
• Encourages excessive bail – Critics argue the bail bond industry incentivizes courts to set higher bail amounts that poorer defendants can’t afford.

While getting out of jail is a relief, the financial and legal consequences down the road can be severe if you risk property you can’t afford to lose. Even if you comply with all terms, you’ll still be out the non-refundable fee which may leave you further in debt.

Alternatives to Consider

Before putting up your house, car, or other vital property to make bail, be sure you’ve explored other options. Here are some alternate ideas to discuss with your lawyer:

• Request an affordable bail reduction or modification of bail terms you can meet.
• Use a credit card or borrow from family and friends to pay lower cash bail amount.
• Hire bail bond company but use lower value replaceable property as collateral.
• If judge allows, agree to pretrial monitoring like drug testing or GPS tracking rather than paying bail.
• If low risk, file motion for release on own recognizance without needing to post bail.
• As last resort, stay in jail until your court date rather than risk assets (still not ideal).

Also be sure to ask your attorney these key questions:

• What are the chances bail could be lowered or waived after a hearing?
• What bail conditions or pretrial release alternatives might the judge accept instead?
• What property do I own that I can afford to risk losing as collateral?
• If I miss court or violate terms, how soon could my property be seized and sold?

Never make the important decision to use property for bail without fully understanding the law in your state, your legal options, and the short and long term financial implications. Get informed advice from your lawyer before moving forward.

Protecting Your Rights and Assets

Posting bail is meant to allow pretrial release while ensuring a defendant’s return to court. But when the financial terms are unrealistic for your situation, using property as collateral can do more harm than good. Protect yourself by:

• Knowing your legal rights – Don’t waive defenses or due process rights without advice from counsel.
• Reading contracts carefully – Watch for hidden fees, penalties, and terms that favor the bonds company.
• Valuing property conservatively – If used as collateral, property should be worth considerably more than the bail amount.
• Reviewing insurance coverage – Some policies may cover bail costs or property seizure, but check your plan details.
• Documenting property condition – Take photos/videos of any property used as collateral in case of damage during seizure.
• Getting receipts for payments – Demand detailed receipts for any fees paid to hold the bonds company accountable.

No matter how desperate the situation may seem, avoid making rushed decisions that could negatively impact your case. Prioritize exploring reasonable bail or pretrial release first before resorting to property collateral that puts your assets and livelihood at risk.

The Bottom Line

Using property as collateral to post bail bonds may seem like the only way out of jail quickly. But the financial risks and potential legal consequences make it an extremely risky choice that should be avoided if at all possible. Always consult with your attorney to identify alternatives that won’t put your assets in jeopardy. With sound legal advice and prudent decision making, you can secure pretrial release while also protecting your property and rights.

References

FindLaw – How Does Bail Work
FindLaw – Release on Own Recognizance