You’ve just agreed to be a co-signer on your friend’s bail bond. Now, reality hits: this could impact your finances down the line. In the heat of the moment, you just wanted to get your friend out of jail and back home as soon as possible. Since your friend was accused of a serious crime, the bond was astronomical, but you thought that you could handle it by working with a bail bond agency.
As time goes on, maybe you lose your job, struggle with your home business, or, worst case, your old friend jumps bail in the middle of his trial. Now, you are left dealing with the bail bond debt and the severe consequences it could have on your financial future.
If you are in this position, you may be considering declaring bankruptcy, but you should understand how it applies to bail debt before you go any further.
What Is Bankruptcy?
Bankruptcy is a legal and financial process wherein an individual or business can have some or all of their debts forgiven by the federal government. There are several types of bankruptcy, categorized as “Chapters,” and each is designed for a specific situation. The most common type is Chapter 7 or “liquidation bankruptcy,” which involves selling off certain assets to pay portions of your debts. Once you have exhausted all options, a federal court will “discharge” or forgive the leftover debt, but some forms of debt cannot be discharged, such as court-ordered child support payments.
Bankruptcy is considered a last resort and comes at a great cost. It will negatively impact your credit score and will appear on any reports for at least 10 years. This could make it difficult for you to apply for a loan, mortgage, or new line of credit. You also have to be careful about when and how you declare bankruptcy, as it you can be charged with fraud if you are not careful.
How Is Bail Bond Debt Categorized?
How bankruptcy affects bail bond debt will depend on the nature of your bond. When you co-sign a bail bond without putting down collateral, it is considered an unsecured bond. Unsecured bonds are treated as standard forms of debt during bankruptcy, meaning they can be partially or completely wiped out through bankruptcy. A court will often require bail bond debt to be paid last, after all the required assets are sold off, thus it can be dismissed through bankruptcy.
When you file for bankruptcy can heavily impact your unsecured debts. If you declare bankruptcy within 70 to 90 days of acquiring the debit, the creditor can argue that you were aware that you going to declare bankruptcy and committed fraud when you signed the original agreement.
In addition, if you co-signed for a bail bond and put down collateral, then bankruptcy may not be an option. When a bail bond agency agrees to post bail with collateral, it places a lien on that property. Liens cannot be wiped out through bankruptcy, and you will be required to continue making payments on the debt even if you do declare bankruptcy. You also cannot sell off the property until the lien has been released.
What Are Your Options?
As mentioned earlier, bankruptcy is a last resort. If you are having difficulties making your bail bond payments, you should talk to your agent about your payment plan. Here at Balboa Bail Bonds, we have a variety of affordable payment plans and financing options that we can develop based on your situation. When you co-sign a bond with us, you only pay our 10% premium. There are no added fees or hidden costs. We allow several payment methods, including Visa, MasterCard, Amex, cash, checks, and money orders, and we can structure a plan around collateral as well.
If you need to post bail for a friend or family member, reach out to Balboa Bail Bonds immediately. We are always available to help our clients navigate the legal system and provide 24/7 support, 365 days a year. We want to get your loved one home where they can begin preparing their defense. Call Balboa Bail Bonds at (619) 760-2222 if you need to post bail in San Diego, Riverside, or Orange County.