What Is a Court Bond?
A court bond is a surety bond used in court to reduce financial risks and guarantee that a trustee will faithfully execute their duties as ordered by the court Similarly, a court bond also guarantees a trustee's compliance with the decision if the court rules in favor of the other party.
Types of Court Bonds
There are two major categories of surety bonds used in court: Fiduciary or probate bonds and judicial bonds.
Fiduciary or Probate Bonds
Fiduciary or probate bonds are court bonds that guarantee the faithful performance of duties by the party overseeing the estates and other wealth of the deceased, disabled persons, or minors. Below are specific types of fiduciary or probate bonds.
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Bankruptcy Trustee Bonds
Bankruptcy trustee bonds guarantee the faithful performance of duty by a person appointed as a trustee, receiver, or referee in a bankruptcy action. These actions include Chapter 7 Liquidation, Chapter 11 Reorganization, Chapter 13 Personal Reorganization, and Equity Court.
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Subject to specific terms, guardianship bonds and conservator bonds guarantee an honest accounting and faithful performance of duties by individuals responsible for the property and monies of minors or persons with limited intellectual functioning.
Judicial bonds are required by the courts to secure a party’s costs of appeal, attachment, and/or injunction. For example, these court bonds act as a guarantee when a payment must be made after a verdict and while an appeal is considered. Below are specific types of judicial bonds.
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If the resolution of a lawsuit favors the defendant, the replevin bond, subject to its terms, guarantees the plaintiff will return the listed items, plus any other related compensation to the defendant.
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Both defendant/supersedeas and plaintiff appeal bonds guarantee compliance with monetary judgements if the court rules in favor of the other party when appealing to a higher court.