What is a sequestration bond?
Sequestration is when assets are legally seized for a creditor until a debt is paid.
A sequestration bond is similar to a replevin bond or attachment bond but takes things a step further. These other bonds allow a creditor (plaintiff) to sue a debtor (defendant) over property they believe they should legally possess to settle a debt. A sequestration bond then allows a sheriff or marshal to seize and hold the defendant’s property on behalf of the plaintiff.
This bond may be necessary if the plaintiff or court believes the defendant may sell or dispose of the property. It allows the seizure to occur before a final judgment in the case. The sheriff or marshal would then hold the property until the case concludes.
Get Your Sequestration Bond:
- Sequestration is when assets are legally seized for a creditor until a debt is paid.
- A sequestration bond allows a sheriff or marshal to seize and hold a debtor’s property on behalf of a creditor.
- This bond may be necessary if the plaintiff or court believes the defendant may sell or dispose of the property in question before the case concludes.
- Your judge will notify you if you need to post this bond.
How does a sequestration bond work?
Like many other court bonds, a sequestration bond is a three-party agreement between a principal, an obligee, and a surety.
The plaintiff in the case is the principal – the party that must obtain the bond and will be held financially responsible if the court rules in favor of the defendant. If the principal loses the case, they must return the disputed property to the obligee (defendant) and cover their court costs and lawyer fees. If the principal refuses to pay, the obligee may file a claim against the bond.
The defendant in the case is the obligee and bond beneficiary. The obligee has the right to require the plaintiff to obtain a sequestration bond. If a defendant’s property is wrongfully seized, they can file a claim on the plaintiff’s sequestration bond.
The surety company issues the bonds and will investigate any claims that arise to ensure their legitimacy. When claims are valid, the defendant will be reimbursed for any losses they’ve suffered. The plaintiff – or creditor – will then be held responsible for repaying their surety for all claim-associated costs.
Who needs this bond?
You will likely need this bond if you plan to pursue sequestration (taking possession of assets until a debt is settled). Your judge will notify you if you need to post a sequestration bond. It’s essential to obtain the bond immediately so your case may proceed.
How much do sequestration bonds cost?
Your judge will let you know the bond amount you need from a surety provider. You will then pay for a small percentage of that bond amount – called a premium. Typically, the higher your credit score is, the lower your premium rate will be. We can issue sequestration bonds for rates as low as 1%.
Apply for Your Sequestration Bond Today
To successfully apply for a sequestration bond, you will need to complete our application. We may ask for financial documentation, a copy of your court order, a plaintiff’s affidavit, and other information. You can start your application online or call us at (888) 435-4191. One of our agents would happily walk you through the process over the phone!
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.