Illinois Appeal Bonds
What is an Illinois Appeal Bond?
While a client can file an appeal without an appeal bond, the bond is the legal mechanism that stays the enforcement of a money judgment while the case is on appeal. In Illinois, an appeal bond ensures that if the judgment is affirmed, the appellee will be able to collect the full judgment amount, including costs and interest.
The stay of enforcement is only effective if the bond or other form of security is presented to, be approved by, and filed with the court within the time for filing the notice of appeal (typically 30 days from entry of judgment). In Illinois, an appeal bond must be issued through an authorized surety company to be deemed sufficient.
Illinois Appeal Bond Amount Requirements
Illinois Supreme Court Rule 305(a) outlines the requirements for the bond or security amount. Here are a few highlights to be aware of:
- The “Ordinary” Amount: The bond or other form of security must ordinarily be in an amount sufficient to cover the full judgment and costs, plus interest reasonably anticipated to accrue during the pendency of the appeal.
- Interest Rates: Post-judgment interest in Illinois is generally calculated at a statutory rate of 9% per annum (or 6% for local government entities).
- Burden of Proof for Alternatives: If a form of security other than an appeal bond (such as a Letter of Credit) is used, the appellant bears the burden of demonstrating its adequacy to the court.
- Discretion for Lesser Security: If the full amount is not “reasonably available” to the judgment debtor, the court may approve security in the maximum amount that is available.
- Anti-Dissipation Conditions: If the court approves a bond for less than the full judgment plus interest, it must impose additional conditions on the judgment debtor to prevent the dissipation or diversion of assets during the appeal.
Attorneys should be aware that failing to have the bond approved and filed within the initial 30-day window is a common procedural pitfall. While Rule 305(c) allows for extensions of up to 45 days, the motion for an extension must be filed before the original 30-day period expires.
If you are an attorney handling a client’s case in Illinois, you should note that the court also accepts alternative forms of security in lieu of a bond, such as:
- Letters of Credit (LOCs)
- Certificates of Deposit (CDs)
- Escrow Agreements
Rule 305. Stay of Judgments Pending Appeal
(a) Stay of Enforcement of Money Judgments. The enforcement of a judgment for money only, or any portion of a judgment which is for money, shall be stayed if a timely notice of appeal is filed and an appeal bond or other form of security, including, but not limited to, letters of credit, escrow agreements, and certificates of deposit, is presented to, approved by and filed with the court within the time for filing the notice of appeal or within any extension of time granted under paragraph (c) of this rule. Notice of the presentment of the bond or other form of security shall be given by the judgment debtor to all parties. The bond or other form of security ordinarily shall be in an amount sufficient to cover the amount of the judgment and costs plus interest reasonably anticipated to accrue during the pendency of the appeal. If a form of security other than an appeal bond is presented, the appellant shall have the burden of demonstrating the adequacy of such other security. If the court, after weighing all the relevant circumstances, including the amount of the judgment, anticipated interest and costs, the availability and cost of a bond or other form of security, the assets of the judgment debtor and of the judgment debtor’s insurers and indemnitors, if any, and any other factors the court may deem relevant, determines that a bond or other form of security in the amount of the judgment plus anticipated interest and costs is not reasonably available to the judgment debtor, the court may approve a bond or other form of security in the maximum amount reasonably available to the judgment debtor. In the event that the court approves a bond or other form of security in an amount less than the amount of the judgment plus anticipated interest and costs, the court shall impose additional conditions on the judgment debtor to prevent dissipation or diversion of the judgment debtor’s assets during the appeal.
*This does not constitute legal advice, please read our disclaimer.
Who Needs Appeal Bonds in Illinois State Cases?
In Illinois courts, appeal bonds are typically required to stay the enforcement of a money judgment while an appellant seeks to overturn a judgment or order. Except for judgments against most public entities, most monetary judgments require an appeal bond to prevent execution of the judgment during the appeals process.
Here are a few common cases that require appeal bonds in Illinois:
- Contract Disputes
- Class Action Lawsuits
- Personal Injury Lawsuits
- Property Disagreements
- Business Litigation
- Employment Law Disputes
- Product Liability Claims
- Intellectual Property Conflicts with Monetary Awards
- Toxic Tort Litigation
- Domestic Relations Cases involving property division, alimony, or child support
Illinois Appeal Bonds Underwriting Requirements
An appeal bond functions similarly to an extension of credit. It ensures that the judgment debtor will pay the judgment to the judgment creditor if the appeal is wholly or partially unsuccessful. Unlike traditional insurance, which absorbs financial losses, an appeal bond requires the appellant to reimburse the surety company if the appeals court affirms the trial court’s decision and the surety ends up paying a claim on the bond.
Collateral Options for Appeal Bonds:
- Cash: This is the fastest and most straightforward method for securing an appeal bond. Appellants can also potentially earn interest on their cash during the appeal.
- Bank Letters of Credit: These are a financial guarantee issued by a bank to a surety, which confirms availability of funds upon demand up to a stated amount.
- Real Estate: Residential and commercial properties, including single-family homes, multi-family units, office spaces, industrial facilities, and retail properties.
- Marketable Securities: These include non-retirement brokerage accounts holding publicly traded stocks and bonds pledged to a surety as collateral.
Since most judgments are not reversed on appeal, there is a high likelihood that the surety will receive a claim on the appeal bond. Given this high probability of a claim, surety companies will often require collateral equal to the full bond amount before issuing an Illinois appeal bond.
Exceptions to Collateral Requirements
Certain high-net-worth appellants with substantial liquidity relative to the bond amount may qualify for an appeal bond without full collateral. This may include:
- Publicly traded companies
- Banks and financial institutions
- Insurers
- Large private firms
- Individuals with significant liquid assets
FAQs
How Much are the Premium Rates for Illinois Appeal Bonds?
The cost of an Illinois appeal bond is determined by the premium rate, which typically ranges from 0.30% to 4% of the total bond amount. The exact premium rate will depend on several factors, such as:
- The size of the bond requirement
- The type of collateral provided if required
- The financial strength of the appellant relative to the bond amount, if the bond is being considered without collateral
For example, if the appeal bond is required for $8,000,000 and the premium rate is set at 0.75%, the bond premium would be $60,000. It’s important to know that surety companies charge premiums for appeal bonds annually until their liability under the bond has been released. The premium for the first year is considered fully earned once the bond is issued, and any renewal premiums for subsequent years are prorated if the bond is exonerated midterm.
Best Practices for Posting an Illinois Appeal Bond Through a Corporate Surety Company
- Engage an Appeal Bond Expert Early – It is never too early to start discussions with a surety agent. When possible, reach out before the judgment has been entered because when it comes to appeal bonds, “more time” equals “more options” to allow the surety agent to find the best solution for the client’s unique circumstances.
- Ensure Attorney Collaboration – It is best when the attorney is able to confirm the bond amount based on jurisdictional requirements, outline which parts of the judgment need to be bonded, keep the surety company informed of filing deadlines, and review the bond form for compliance with State or local court rules.
- Choose a Surety Partner with Proven Expert – Not all surety agencies are the same. Selecting a provider with a proven strong track record in issuing Illinois appeal bonds ensures your client receives specialized guidance and a smooth approval process. At CSBA, we bring decades of experience exclusively handling civil litigation bonds nationwide.
Why Choose CSBA for Your Client's Appeal Bonds in Illinois?
When the stakes are high, your clients need a professional surety agent they can count on to stay judgment of an enforcement. At CSBA, we have decades of experience in appeal bonds, and we can guide your clients through the complex process.
A Legacy of Expertise & Trust
CSBA has helped appellants secure appeal bonds from various industries involving almost every type of case since 1984. So whether your client is an individual needing a $1 million bond or a publicly traded company with a billion dollar judgment, we have the experience and resources to help.
Exclusive Surety Insurer Access & Creative Solutions
At CSBA, we have access to 30 top-rated surety insurers. Several of these are exclusive or semi-exclusive insurers that most agents don’t have. This unique access and programs allow us to find creative solutions tailored to each client’s circumstances.
How Long Does It Take to Secure an Illinois Appeal Bond?
The time frame to secure an Illinois appeal bond will depend on whether or not collateral is required.
If collateral isn’t required, the bond can be approved and issued within 24 hours in the most straightforward cases.
If the surety does require collateral, the type of collateral can affect the duration of securing an appeal bond. Cash collateral can be secured in a few days, while real estate collateral can generally take 30-60 days, depending on the property type and number of properties being posted.
Steps to Apply for an Appeal Bond
- Contact an appeal bond specialist to review your client’s bond requirement and start the process.
- The bond agent will discuss the various options with you and your client and address any underwriting questions you or the client may have.
- Submit the following documents:
- Application
- Court complaint
- Judgment
- Notice of appeal
- CPA Audited Year-end Company Financial Statement if the client may be a candidate to qualify for an appeal bond without collateral.
- The surety agency will provide a clear roadmap for an appeal bond approval and works closely with your client to efficiently secure the necessary collateral.
Get a Free Quote for Your Client's Appeal Bond in Illinois Today
Filing deadlines for appeal bonds are often strict and time-sensitive. At CSBA, we specialize in simplifying the underwriting process, ensuring a smooth experience so you and your client can focus on the case at hand. Our team of dedicated surety experts is ready to assist you—contact us today to take the next step in securing your client’s appeal bond in Illinois.