A sad result of the ‘the great recession of 2008’ is that many people fell behind in their auto loans. In the aftermath, many vehicles were repossessed by the crediting institutions. And with the large population and all the car friendly scenery, California has seen a big upswing in the number of automobiles repossessed over the past four years. This is not a happy or profitable part of anyone’s business. The number of repossessions continue to increase despite lending agencies best efforts to reduce the number of repossession as much as possible. No bank or credit union wants to go through the process of collecting. It is time consuming and expensive. In addition it can be messy for the collection agents as well. Without proper assurance that their actions are covered by a financial guarantee (such as a sheriff indemnity bond) banks and credit unions are still exposed to the risk of associated with an improper seizure.
Claim and Delivery bonds also known as Replevin and Sequestration bonds eliminate all that extra worry and reduce the unwanted extra risk and mess that can result when receivables are collected without a bond. Claim and Delivery Bonds are required by statute if the plaintiff seeks to levy property before a judgment is made. The bond guarantees that if the replevin is deemed wrongful that the defendant be able to collect damages.
Of these type of bonds extend beyond the automotive lending industry. Other include boats, planes, mobile homes . . . . .
In California, the cost of acquiring a bond is dependant on the value of the property being collected in addition to the details of the case. A judge has leeway when setting the amount of the bond and this can be frustrating to parties but is important to keep costs low in circumstances where a flat rate would create an unnecessary burden.
The bond experts at Jurisco have answers to any questions that may arise while you are shopping for a bond agency.