Important Facts about Collateral in Minnesota, when implemented as part of a bond agreement and bond being executed.
Many companies try to avoid collateral as it is simply to much work and time consuming in Minnesota. Many types of collateral include, real estate, property & cash. Collateral cannot be taken in lieu of the required minimum premium for the bond to be executed or for the full premium amount required by law.
All collateral is additional and separate to the premium that is already required to be collected by law. Any collateral obtained or “secured” also requires an individual receipt that is indicated as collateral. This particular slip has the date, time, name of defendant, signing party type of property, who is holding property etc. Collateral slips vary from surety companies, however the requirement to use one if collateral is secured is not optional.
Any bail client, should understand if you utilize additional collateral to a bond, it is imperative you receive the necessary documents showing you secured the collateral. A premium receipt in many cases is used together with the collateral slip. The premium slip may have a section that asks if collateral was secured always ask for a collateral slip number.
Most of the time the bond companies cannot hold the collateral, it is held by the surety company that appoints its agents to execute bail bonds. The bonding agency, is also required to keep a collateral log that is audited at the end of the year. This assists in records and timely returns of any collateral taken by the bondsman. Once the defendant is sentenced and the bond is discharged the collateral is required to be returned in part or in full. This can depend on many factors such as, if the bail client made all appearances, if the bond executed was ever forfeited, if there was unpaid premium or if the client was entered into collections.
The bond company contract should have outlined these factors at the time of the bail bond execution. Collateral protects the bonding agency from absorbing any additional costs if applicable and when allowed by law. When the collateral is required to be returned, it is the bond company’s responsibility to contact the surety and make sure the collateral is properly returned in a fast efficient lawful manner. You as a consumer can call the bond company and request what date the collateral was entered into their log and when the bond was discharged to secure the return of your collateral being held.
It is your right to know why additional fees were charged from your collateral, if any were applied. It is your right to receive your remaining or full collateral back in a timely and reasonable manner. It is your right to know why your collateral is delayed being returned once a bond has been discharged, or why it has not been returned.
All companies are different, that is why it is important to always have all your paperwork and all the knowledge. Transparency & knowledge, makes stressful a situation, less stressful.
Tips:
- Consider not using cash to secure bond collateral.
- Use a credit card or check if possible, so there is secondary record of the transaction.
- If you use a credit card to pay collateral, there will also be additional documents that are required to be signed.
- Always request documentation additional to your premium receipt to validate you have secured collateral with the bonding agency.
- There is no such thing as to much paperwork to document your business transaction with a Bail Bondsman (Insurance Producer) in Minnesota.
