How To Use A Surety Bond For Court Appeals Court

  • June 21, 2024
  • 3 min read

So what is a surety bond for a court appeal and how do they work? Well, you may have heard in the news quite a bit about a very high-profile case of a surety bond for an appeal of a litigation court case.

Function of Appeal Bonds
And the way an appeal bond works is if you lose a court case in a lawsuit and you have a judgment issued against you and you want to appeal that judgment. Say somebody sues you for $10,000 and you lose the lawsuit, but you want to appeal it, you’re supposed to pay that $10,000 judgment because there’s interest that racks up on it. If you want to appeal it, that’s fine, but you’re supposed to pay the judgment while you wait for the appeal to happen.

Purpose of Surety Bonds
A surety bond is a way for you to not have to pay the judgment initially. You put up a bond in the amount of the judgment while your appeal takes place. If you prevail on your appeal, when you win, then you don’t have to pay the judgment. You do have to pay the surety bond fee.

Surety Bond Fees
The surety bond fee is set by the bonding company and some courts require that the surety bond be a multiple of the judgment. So if you have a judgment of $10,000, some courts require you buy a bond for $15,000. Now that bond isn’t going to cost you $15,000. It’ll probably cost you, you know, several hundred dollars, but it’s a way for you to not have to pay that money out of pocket if you think you’re going to win your appeal.

Consequences of Losing an Appeal
Now, what happens if you lose your appeal? Well, if you lose your appeal, the surety bond is there to make sure that the defendant or the plaintiff in the case gets paid. You’re the defendant, you lost, the plaintiff gets paid. The surety bond will pay the judgment, but you have to pay them back. So the surety company’s going to make sure you have enough assets to pay for this bond, pay for the judgment.

Responsibilities and Risks
So it’s not free money. It’s not like an insurance policy where you buy insurance, if you lose they pay the claim. They will pay it if you don’t pay it immediately, but then they’re going to come after you to pay the money back. So a surety bond for an appeal is a very good way to avoid having to come out of pocket for an appeal you believe you’re going to win. It’ll have a fee involved with it, but it’s a method to have the court make sure that the defendant is made whole but you as a plaintiff have your rights to appeal be validated and not have to come out of pocket all that money initially.

Further Assistance
If you have questions about any type of surety bond or an appeal bond, you can click the link below riskcoverage.com. We also have a consultation available. If you have more questions, you can talk live one-on-one with a licensed surety bond producer and we’re glad to be of assistance.

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