What Is Collateral?

Besides paying the 10% of the total bail amount to the bail company as premium which is non-refundable, the company needs a financial assurance which they can encash in case of forfeiture of the bond due to failure of the defendant to appear for the court hearings of the case. This assurance or financial back up received by the bail company from the defendant by the bail company in the form of property or valuable assets is called collateral. This collateral is returned to the defendant when he shows up for all his court hearing dates and when the case is finally dismissed from the court. If the defendant fails to appear in the court hearings and the bond gets forfeited the bail company can get the collateral converted to cash and recover the remaining bail amount from it.

Where Can A Bail Bond Be Posted?
Is Collateral Needed To Secure A Bail Bond?