§ 8510 Release Bond For Withheld Funds

• •If someone stops your money because of a notice, you can get it back by giving them a special promise called a 'release bond'.
• •This promise must come from a special insurance company and must cover the money you might owe plus extra costs.
• •The promise must be for 125% of the money mentioned in the stop payment notice.
• •Once the person holding your money gets this promise, they must give you your money back.

Imagine you hired a builder to fix your house, but they didn't finish the job. You tell your bank to stop paying them the $10,000 you owed. The builder can get that $10,000 back by giving the bank a special promise (a release bond).

The builder would need to get a promise from an insurance company for 125% of $10,000, which is $12,500. This promise says the insurance company will pay you up to $12,500 if you win in court. Once the bank gets this promise, they have to give the builder the $10,000.