How to Place a Lien on an Insurance Policy

If someone owes you money, one way to collect is to place a lien on the person's real or personal property. Personal property includes everything from cars to insurance policies that have value. Typically, only life insurance policies have actual cash value. If the person who owes you money has a whole life or universal life insurance policy, you may be able to place a lien on that property so that you receive the proceeds when the policy is cashed in.

Instructions

1

Get a judgment against the debtor in court. In order to get a judgment for monies owed, you'll need to sue and win in civil court. If the dollar value is low enough, you should be able to sue in small claims court. The dollar limits vary by state and range, from $1,500 in Kentucky to $25,000 in Tennessee.

2

File a judgment lien with your local civil court. A judgment lien is a notice that states you are entitled to place a lien on a debtor's personal property. The exact notice will differ from state to state; ask the clerk at your local civil court for the correct form. For example, in California, a Notice of Judgment Lien is used to create a lien.

3

Locate the life insurance policy. To collect on the lien, you'll need to know the name and address of the life insurance company.

4

File a Writ of Execution with the sheriff in the jurisdiction in which the life insurance policy is held. For example, if you live in Duval County, Florida, and want to place a lien on a life insurance policy held by a company in Saratoga County, New York, you must send the Writ of Execution to the sheriff in Saratoga County. The sheriff will place the lien for you.