Court Bonds for Legal Requirements

When a court rules against a defendant and orders the defendant to pay a judgment, that payment need not be made until the appeals process has run its course. In many cases, that can take years. The defendant can be ordered to provide an appeal bond in the amount of the judgment that is being appealed.

The bond ensures that funds will be available to pay the judgment even if the defendant exhausts all appeals without the lower court’s decision being reversed. It’s not unusual for a defendant to end up declaring bankruptcy under the burden of high legal bills and court costs.

Because of the high odds against winning an appeal, the defendant must provide collateral in the full amount of the award, in addition to paying the appeal bond premium.

Attachment is the legal process through which a plaintiff can seize contested property or money owed on a debt even before the matter has been ruled upon by a court. Plaintiffs often request attachment when there is reason to believe that the defendant is likely to flee the jurisdiction and not pay a court-ordered judgment.

Attachment legally encumbers real estate, vehicles, bank accounts, and other assets so that they cannot be sold or transferred before a final ruling is made on the case. The plaintiff does not take physical possession of property that has been attached. An attachment bond is the plaintiff’s guarantee to release any claim on the defendant’s property if the defendant wins the appeal. There is no question of damages incurred as the result of attachment because the property was never in the plaintiff’s possession.

Replevin bonds work like attachment bonds with one key difference—in a replevin action, the plaintiff takes physical possession of the defendant’s property prior to the conclusion of the appeal process. A replevin bond takes into account the possibility of damage to or the complete loss of the defendant’s property while it is in the plaintiff’s possession. If the defendant wins the appeal, a replevin bond pays monetary damages to the defendant if that property is not returned in its original condition.

An injunction is a court order requiring someone to perform or refrain from performing a specific act.  An injunction can be ordered for either party in a lawsuit. Most often, a plaintiff will request an injunction against the defendant carrying out a certain action until the lawsuit has been ruled upon by the court. For example, an environmental group suing a developer could file for an injunction prohibiting any work on the land in question until the lawsuit has been settled.

A plaintiff filing for an injunction will be ordered to purchase an injunction surety bond. If the plaintiff loses the lawsuit, the injunction is lifted and the injunction bond provides compensation for any financial loss the defendant incurred as a result of the injunction.

The term “plaintiff bond” encompasses several different types of court bonds that a plaintiff might need to purchase. This can include injunction bonds, replevin bonds, attachment bonds, and more.

The terms “probate bonds” and “fiduciary bonds” are used interchangeably. They both refer to surety bonds that are required from people appointed by the court to serve in certain fiduciary roles—for example, as the executor of a deceased person’s estate.

Fiduciaries are entrusted with the authority to manage the assets of others and have a legal responsibility to faithfully perform their duties. A probate bond is the appointee’s guarantee to live up to that responsibility.

Bankruptcy bonds are a type of probate or fiduciary bond that court-appointed trustees in bankruptcy proceedings must purchase. A bankruptcy surety bond is a trustee’s guarantee of faithful performance of fiduciary duties associated with identifying and liquidating the debtor’s assets and distributing the proceeds to creditors.

In most states, a person appointed to take legal responsibility for a minor and manage the minor’s income and assets is referred to as the minor’s “guardian.” Guardianship bonds are another type of probate or fiduciary surety bond. A guardianship bond is a guardian’s pledge to live up to the fiduciary responsibilities that go along with the role.

A similar bond is required from a person appointed to manage the assets of an adult who has been found to be incapacitated. Depending on the particular state, someone serving in this role is called a “custodian” or a “conservator” and is required to purchase a surety bond as a guarantee of their good faith as a fiduciary.