How Do Appeal Bonds Work?

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Appeal bonds are ways of guaranteeing payments from a court judgment through a third party. Find out how appeal bonds can keep people from selling their houses due to court judgments with help from a personal asset manager in this free video on the bond market and money management.

Part of the Video Series: Bond Market
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Video Transcript

Hi, I'm Roger Groh with Groh Asset Management. We're here today to talk about appeal bonds, how they work, what they are and how you can get one. If you've ever been sued and a judgment has been rendered against you, meaning that a court has found that you owe money to someone else and at that point you have a choice, you can pay up or you can appeal it. If you elect to appeal it, it may very well be that the lower court requires you to guarantee payment of the judgment that was initially rendered. One of the ways to do that is to actually pay it. Well nobody really wants to do that, so a business has developed where you guarantee that you will pay that using a third party. That third party issues the guarantee in your behalf and that's called the appeal bond. Now appeal bonds are always 100% collateralized so there's no risk at all to the party on the other side. They know that they're going to get paid worst case. But what it does save is you selling your house in order to satisfy the initial judgment pending an appeal as an example. So it's a way to satisfy an appeal, satisfy a judgment where you are moving on to an appeal and they're always 100% collateralized, you'll have to talk with your local tax consultant or court about how to go about buying them and who might be a reputable company for where to get them in your local market. I'm Roger Groh with Groh Asset Management, thank you for spending some time with me, I hope you never have to buy an appeal bond.

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