Detailed Answer — what you need to know under New York law

When someone dies, the decedent’s debts do not automatically disappear. The personal representative (executor or administrator) must identify valid creditor claims and pay them from estate assets before distributions to beneficiaries. In New York, the rules that govern presentation, allowance, and contesting of creditor claims are in the Surrogate’s Court Procedure Act (SCPA) and related statutes; the duties and powers of fiduciaries are governed by the Estates, Powers & Trusts Law (EPTL). See SCPA and EPTL for the controlling statutory framework: SCPA (New York Consolidated Laws) and EPTL (New York Consolidated Laws).

Below are practical, step-by-step actions you (or the personal representative) can take to verify a creditor’s payoff quote and, if necessary, to contest it in New York.

Step 1 — Request detailed, written documentation

Ask the creditor (or debt collector) for a written, itemized payoff statement and supporting documents. Specifically request:

• A dated payoff quote showing principal, interest rate, daily/periodic interest accrual method, itemized fees, and the cutoff date for the payoff figure.
• A copy of the original contract or account agreement, promissory note, mortgage or security agreement (if applicable).
• A complete payment history showing charges and credits up to the date of death and after (if any).
• Evidence the creditor’s claim was timely presented to the estate/Surrogate’s Court (proof of claim form, envelope receipt, or filing stamp).

Keep the decedent’s death certificate and the personal representative’s letters (letters testamentary or letters of administration) ready; creditors often require them before releasing account data.

Step 2 — Verify basic math and legal basis

Once you have documentation:

• Recalculate the payoff: check the principal balance, interest rate, interest period, compounding method, and dates used. Small date differences can change interest substantially.
• Confirm whether post-death interest or fees are permitted under the contract or New York law. Contracts often control interest; some post-death charges may be improper.
• Check whether the claim is unsecured or secured (e.g., mortgage). A secured creditor has a priority claim on the collateral; an unsecured creditor’s recovery depends on remaining estate assets.

Step 3 — Confirm presentation and timing under Surrogate’s Court rules

New York law requires creditors to present claims and follow Surrogate’s Court procedures to seek payment from the estate. There are strict time limits and required forms. For details, consult the SCPA (the Surrogate’s Court Procedure Act) and related resources: https://www.nysenate.gov/legislation/laws/SCPA. Also review the CPLR rules on limitations that can affect related actions: https://www.nysenate.gov/legislation/laws/CPLR.

Important practical points:

• The personal representative should confirm whether a creditor has actually presented a claim to the Surrogate’s Court. If a creditor has not formally presented a claim, the estate may not be required to pay the quoted amount.
• There are statutory deadlines for presenting claims and for the personal representative to accept or object. Missing deadlines can affect a creditor’s right to collect from the estate.

Step 4 — If you suspect errors or overcharges, object in writing and preserve rights

If the payoff quote looks inaccurate or the creditor cannot justify fees/interest:

• Send a written, dated objection to the creditor and to the estate’s file, stating the specific items you dispute and requesting correction or explanation.
• Refuse to pay amounts that are unsupported until the creditor provides documentation. Keep records of all correspondence and delivery confirmations.
• If you are the personal representative, consider filing a formal objection to the claim in Surrogate’s Court (the appropriate procedure under the SCPA) rather than simply denying payment informally.

Step 5 — Use Surrogate’s Court procedures to litigate or resolve the dispute

If informal resolution fails, the next step is a court process:

• File a motion or objection in Surrogate’s Court asking the court to disallow (or limit) the creditor’s claim. The Surrogate’s Court resolves contested claims, determines allowance, and orders payment from estate assets when appropriate under the SCPA.
• The creditor must prove the claim by offering admissible evidence (contract, account records, etc.). The personal representative may cross-examine, submit counter-evidence, and argue legal defenses (statute of limitations, payment, setoff, wrongful fees, etc.).
• The court can disallow all or part of the claim, reduce interest/fees, or order other relief based on the record and applicable law.

Step 6 — Consider negotiation, settlement, or mediation

Often estates and creditors settle for less than the quoted payoff to preserve estate value and avoid expensive litigation. Consider:

• Demanding a certified, short payoff figure with a firm expiration date and asking the creditor to waive post-death interest if appropriate.
• Proposing a lump-sum compromise or a structured settlement with court approval if required.

Step 7 — When to consult an attorney

If the claim is large, the documentation is complex, the Surrogate’s Court deadlines or procedures are unclear, or the creditor threatens suit, get a New York probate/estate attorney. An attorney can: prepare and file objections, represent the estate in Surrogate’s Court, and negotiate or litigate complex disputes. See general fiduciary duties in the EPTL and SCPA authorities: EPTL and SCPA.

Evidence and documents to gather right away

• Death certificate and letters testamentary/letters of administration.
• All account statements for the debt in question (last 24 months if possible).
• Original loan/mortgage documents or contracts.
• Copies of all communications with the creditor or their collection agent. Keep a written log of calls.
• Proof of any payments made after the date of death (who made them, when, and why).

Helpful Hints

• Do not pay a quoted payoff until you have requested and reviewed the itemized payoff and supporting documents.
• Insist on a written payoff figure with an expiration date. Oral quotes change and are hard to enforce.
• Preserve all communications; courts treat contemporaneous records as strong evidence.
• If a debt collector is involved, federal consumer protections (e.g., the Fair Debt Collection Practices Act) may apply; keep in mind those are federal rules, not New York statutes.
• Remember that secured creditors (mortgages, car liens) have different remedies than unsecured creditors — confirm whether collateral exists and its value.
• Be mindful of deadlines to present claims or to file objections in Surrogate’s Court; missing a deadline can forfeit defenses or claims. For procedural rules and filing requirements, consult the SCPA: https://www.nysenate.gov/legislation/laws/SCPA.
• If you are the personal representative, do not distribute estate assets until valid claims are paid or resolved; doing so could expose you to personal liability.