Monday, April 12, 2021

Bail bonds could put you at financial risk

Bail bonds may seem like a good, if noble idea, especially for those who wish to be of assistance to friends or family members that require surety for a loan they need to acquire. And sure enough, providing one’s reputation as the surety needed to secure the loan does effectively make the difference between someone securing the loan and not. However, there are inherent risks to acquiescing to bail bonds.

The crux of the bail bond dynamic is that one person needs financing but can only get it if another person puts up as the surety to ensure that they will be financially liable for the repayment of the funding should the person who received the funding not be in a position to. So essentially if person A, who has been given funding by a bank, finds themselves unable to repay that loan, then person B guarantees that they will make the payment. But even though person B helps a friend or family member that they know is financially secure, things could change and person A could all of a sudden not have the financial means to repay their debt.

This would leave person B financially vulnerable and having to pay for a debt that isn’t theirs. But since they agreed to bail out person A, they have to follow through. So it’s important to ensure that the person you’re helping can afford the repayment and has a backup in case they can’t so their debt is not left with you.