How Do Bail Bondsmen Make Money?

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Contractual Agreement

  • Established bail bondsmen enter contractual agreements with a variety of courts around the city and county, stipulating to posting a bond and agree to be irrevocably bound by the agreement. In return, the court allows them to bail a defendant out of jail by signature--without having to front the cash for the transaction. The court understands that either the defendants will return on their scheduled court date, or the bail bondsmen will pay the entire bail amount to the clerk of the applicable court. Because the bond the bail bonds office agrees to is irrevocable, the court knows it will receive payment.

    Although at face value this looks like a situation that is beneficial for only one side, the fact that the bail bonds office is now in hot demand by defendants wishing to avail themselves of this prearranged agreement places the bail bondsmen in a good position to make a lot of money.

Nonrefundable Fee

  • The bail bonds office requires the defendant to pay 10 percent of the bail bond amount at the beginning of the transaction. This is a nonrefundable fee, even if the defendant shows up for trial as scheduled. A bail bonds office that judiciously bails out low flight risks that carry high bail amounts can make money simply by taking in the 10 percent fee.

    For example, if a defendant is required to post $50,000 bail, the bail bondsman will seek a signature release of the individual and take $5,000 as up front payment to do so. If the bail bonds office bails out 10 such defendants in one week, they will have made $50,000.

Tangible Assets

  • Bail bondsmen see a sizable profit only if the defendants they bail out of jail show up for their scheduled court hearings. If the defendants fail to do so, the bond is called in by the court. Working with the example from above, if the 10 defendants who were bailed out fail to appear for their court dates, the bail bondsmen are liable for $500,000. To ensure that this does not happen, bail bondsmen require a tangible security to be placed with them, such as the title to a valuable car, or they place a lien on a defendant's home. If the bond is forfeit, the bail bonds office seizes the property and sells it to recoup the money paid out via the bond to the court.

References

  • Photo Credit handcuffs image by William Berry from Fotolia.com
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