What is an individual surety bond?
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An individual surety bond is a guarantee by an individual that an obligation will be met. The guarantee or bond is secured by the unencumbered pledged assets of the individual providing the guarantee (bond).
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What types of obligations are involved in surety bonds?
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The types of obligations that may be involved in a surety bond are a contractual committment, the payment of a debt or the performance of certain duties.
The pledged assets of the individual providing the bond must be sufficient to cover the bond obligations.
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What assets are considered acceptable to provide an individual surety bond?
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Acceptable assets for providing an individual surety bond are cash, certificates of deposit/cash equivalents with a federally insured financial institution, United States Government securities at market value, stocks and bonds actively traded on a national US security exchange, real property and irrevocable letters of credit issued by federally insured financial institutions.
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If real property is used to provide an individual surety bond, what evidence should be provided to the obligee?
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If real property is used to provide an individual surety bond, the individual surety should provide the obligee with a certificate of title prepared by a title insurance company. The title insurance company should be one approved by the United States Department of Justice.
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How do pledged assets secure an individual surety bond?
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A security interest in the pledged assets is given to the obligee. The security interest may be one or both of the following: an escrow account, a lien on real property.
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Who executes an individual surety bond?
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The individual acting as surety executes the individual surety bond.
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Are any special forms used to execute an individual surety bond?
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Yes. Individual surety bonds are executed using Standard Form 28.
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Are individual surety bonds accepted by the United States Government?
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Are all individual sureties accepted by the United States Government?
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For what reasons might an individual be excluded from acting as a surety on a contract with the United States Government?
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An individual might be excluded from acting as a surety on a contract with the United States Government for any of the following causes: failure to fulfill obligations under a bond, failure to disclose all bond obligations, misrepresentation of the value of available assets or outstanding liabilities, false or misleading statements, signatures or represemtations on a bond or affadavit of individual suretyship, any serious and compelling cause that is determined to warrant exclusion.
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