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Surety Bond vs. Cash Bond: What Are The Main Differences?

Published in Uncategorized on August 16, 2021.

what is a surety bond

No one wants to sit in jail if they do not have to, especially when they have not been convicted of a crime. Fortunately, when law enforcement charges someone with a crime, the court sometimes provides an option to release them as they await trial. They do this via several methods, including letting them out on bail. A bond is basically a means of providing bail to get someone out of jail. 

Posting bail is a financial promise to the justice system that the accused will show up for their court date. Two types of bonds are cash bonds and surety bonds. While there are some similarities between these bonds, there are also clear differences that you should understand. Here we will address what those differences are, and provide the definitions of each.

What Is a Cash Bond and How Does it Work?

A cash bond is a cash amount paid to the judicial system to bail someone out of jail. If the person does not show up for court when required, the system may keep the cash. The benefit of a cash bond is that it is a direct, generally fast way of bailing someone out.

In addition, when the person appears for court as required, the court will return the full cash bond you provided minus any costs or fees that may be owed based on the outcome of the case.  On the other hand, when you pay a cash bond for someone, you carry the risk of forfeiting every dollar if the accused does not appear in court. 

Generally, you can pay a cash bond online or in-person via:

  • Cash, 
  • Debit card, or 
  • Credit card.

There is often a small administrative fee that you must pay as well. Please note that due to COVID-19, some districts in Indiana are currently limiting payments to the online method only. 

What Is a Surety Bond and How Does it Work?

Surety bonds are not as simple, fast, or straightforward as cash bonds. To obtain a surety bond, at least three parties are typically involved. A friend or family member of the accused who is trying to get them out of jail is the first person necessary to get a surety bond. Generally, someone in jail has a difficult time making such arrangements without help. So they need a friend or family member to step in. Then, a bail bondsman and a surety bond company also become involved. 

The Indiana Department of Insurance oversees the bail bonds industry within the state. Reputable bondsmen complete many steps to become a bail agent in the state. Upon licensing, bondsmen are able to front the money on behalf of the accused or his representative to get them out of jail.

A surety company is a business the bail bondsman works with to borrow the money to post your bail.  Like a bail bondsman, the state of Indiana must license a surety company. The state maintains a list of licensed surety companies so that you can be sure you are working with a legitimate entity.

What Is a Surety Bond?

With these terms in mind, let’s address the description of surety bonds. As with the cash bond, a surety bond provides financial backing to pay someone’s bail. Though the end result is the same, how the money gets to the court is very different. Here are the steps to obtaining a surety bond:

  • Someone requests money from a bail bondsman to bail out a defendant;
  • The bondsman usually requires this person to pay at least 10% of the full bail amount in cash and guarantee the remainder with collateral;
  • The collateral can be in a wide array of formats from jewelry to deeds to real property;
  • The bail bondsman then contracts with a surety company to get the full amount of the bail money needed; and
  • If approved, the surety company pays the full remaining amount of bail and secures the defendant’s release.

A surety bond is a good option as the initial person requesting the bail pays only a low percentage of the full bail amount in cash. But there are drawbacks to this option. Posting any bond carries a risk of loss. If you get a surety bond for someone, you risk losing the 10% that you put down as well as your collateral if the defendant does not appear for court. In addition, this is a more time-consuming method of posting bail than the cash bond method, as there are multiple parties and contracts involved.

Finally, it is important to know that there are individuals that seek to take advantage of those who need help seeking bail. Some will offer deals and promises that are illegal and completely unreliable. Because unethical people will try to take advantage of people at this vulnerable time, it is critical that you only use a licensed bondsman or company. 

A Final Look at Cash Bond vs. Surety Bond

Both a cash bond and a surety bond are methods to help secure the release of the person law enforcement has arrested.  However, remember these differences:

  • You assume the risk of losing that entire amount paid with a cash bond; vs.
  • With a surety bond you can not get your payment back from the bondsman and you stand to lose additional collateral as well, plus you must involve a bail bondsman and surety company.

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Eskew Law is an Indianapolis law firm founded over a decade ago. We began with a sole purpose—to help the people of Indiana who are struggling with legal situations that they cannot handle on their own. Our goal remains the same today. We specialize in criminal defense, family law matters, and personal injury cases. 

At Eskew Law, LLC we provide personal, one-on-one contact with our attorneys. No case will be passed off to a paralegal or legal assistant. Our clients’ ongoing praise indicates our dedication and competence. Online or by phone at 317-316-8909, we are available to speak with you when you need us.  Let’s Talk Today. We’re Ready To Listen.

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