From time to time, clients ask about the procedure to deposit cash with the Court in lieu of a bond. Clients have turned to my office to answer questions on these matters. Since my office does not handle the actual payment of funds into the court nor do I have direct experience, I will refer to the CPLR and some past experiences that I have heard from good clients of mine.
According to New York, CPLR 8010, the County Treasurer or the Commissioner of Finance in the City of New York is entitled to 2% upon a sum of money being paid out of the Court by him. One-half of 1% upon a sum invested by him, and 2% of the par value of the investments transferred to him. So, for the County Treasurer to take money or a cash deposit in place of a bond, they are going to charge you a certain percentage. For them to invest the money, they’re going to charge a percentage. Then, to pay you back the money, they are going to charge a certain percentage.
1. The reason I bring this up is that sometimes clients, when they must put up collateral for a bond, say: Well, I’ll just put it with the City. Now there are often issues with that such as paying these associated fees for the city or county treasurer to accept the money and fees to get it back, whereas a bond premium is generally significantly cheaper than what the city or county treasurer would charge.
2. The county may not accept the cash unless it is given in a specific format or unless the court order has specific language directing the acceptance of cash. You should contact the department that will take the funds to find out their procedure.
3. Getting the funds back from the county can be difficult. You will have to motion to the court for the return of the funds. You will have to run the motions by the county to ensure that they have proper wordage so that once the order is signed by the judge, the money will be returned.
I bring this up because there are a lot of situations where people don’t take into account the overall cost of putting money in the court, getting money back — spending money to get the money back — so they don’t get the full picture. They may save a small amount of money initially, but over the long run, it’s generally not as cost-effective.
The above is an overview of the issues and fees associated with the counties located in the city of New York. Various counties outside the city charge various rates and have their own procedure.
So, when people ask me, why would they get a bond? I say you get a bond because it’s more cost-effective, and it’s more efficient. There’s less legwork. There’s less time that your attorney is going to spend in Court trying to negotiate different things with the Treasurer and getting the funds back after the matter. With the surety, provided the cancellation is appropriate, the funds are given back promptly.
PEDERSEN & SONS SURETY BOND AGENCY, INC.
15 Maiden Lane Suite #800
New York, NY, 10038
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