Detailed Answer
Short answer: When a creditor gives a payoff quote for a debt of a deceased person, you should (1) get the quote in writing and ask for a full, itemized account and proof the claimant has a valid claim or assignment; (2) compare the itemization to estate records and any contracts; and (3) if the quote is wrong or unsupported, formally object to the creditor and — if necessary — ask the probate court to disallow or limit the claim. Michigan law governs how claims against an estate are presented and contested, and the probate court supervises resolution of disputed claims. This is general information, not legal advice.
What to request immediately
- Ask the creditor for a written payoff statement showing: original balance, payments applied, date interest stopped/started, interest rate calculation, fees or collection costs, and the date the payoff figure expires.
- Ask for supporting documentation: the original contract or account agreement, the last periodic statement, proof of assignment or sale if the debt was transferred to a third party, and any payment ledger showing how the creditor reached the payoff number.
- Request a copy of the creditor’s proof of claim if one exists or will be filed with the probate court.
How to check the payoff quote
- Compare the creditor’s itemization to the decedent’s records: bank statements showing payments, billing statements, and any payment authorizations.
- Confirm the exact account number and creditor identity. Debts sometimes get sold and the amount may include improper collection fees or duplicative charges.
- Look for interest or fee charges dated after the decedent’s death. Some charges may be invalid for estate administration or may require court approval.
- If the debt is secured (e.g., mortgage, vehicle), confirm the payoff quote includes prorations, escrow, or any arrearages. For secured debt, the holder should indicate how to release the security after payoff.
- Check whether the creditor has provided an itemized daily interest figure. Ask for the formula and the date through which interest was calculated.
If you accept the payoff quote
Get a written payoff demand with the exact amount and the date through which it is valid. Pay from estate funds only after the personal representative (executor/administrator) confirms the estate has sufficient assets and authority to pay the claim. Retain a receipt and a signed release from the creditor showing full satisfaction of the debt.
If you suspect the quote is wrong or the claim is invalid
- Send a written demand for verification within any deadline set by the personal representative or the probate court. Keep proof of delivery (email receipts are helpful but certified mail is better).
- Ask the creditor to file a formal proof of claim with the probate court if one has not been filed. Under Michigan probate practice, claims against an estate are typically presented and allowed or disallowed in probate. See the Estates and Protected Individuals Code (EPIC), Chapter 700, for statutory rules and deadlines: MCL Chapter 700 (EPIC).
- If the creditor files a claim you believe is excessive or invalid, file a written objection with the probate court and request a hearing. The personal representative may also object on behalf of the estate.
- At the court hearing the creditor must present admissible evidence supporting the claimed amount (contracts, account statements, assignments). You may subpoena records if necessary.
- If the creditor refuses to provide documentation, ask the court to disallow the claim or limit recovery to the documented amount.
Procedural and timing considerations in Michigan
The probate court sets procedures and deadlines for filing and objecting to claims. Time limits often depend on when the personal representative was appointed and whether notice to creditors was published. For details on filing requirements, claim procedures, and forms, review the Michigan probate forms and instructions at the Michigan Courts website: Michigan Courts — Probate Forms, and consult Chapter 700 of the Michigan Compiled Laws: MCL Chapter 700 (EPIC).
When to get an attorney
Consider hiring a probate attorney when: large creditor claims are disputed; the estate lacks sufficient assets; a secured creditor threatens foreclosure; multiple creditors file competing claims; or you need help objecting in probate court. A lawyer can prepare objections, subpoena records, and represent the estate at hearings.
Disclaimer: This article explains general Michigan probate principles and common steps people take to verify or contest a creditor’s payoff quote. It does not provide legal advice. For advice about a specific situation, consult a licensed Michigan probate attorney.
Helpful Hints
- Get everything in writing. Verbal payoff quotes are easy to dispute; written itemizations are required to verify amounts.
- Keep careful records: dates, who you spoke with, copies of mail, and photos of documents. These help in court if you must contest the claim.
- Don’t pay from personal funds. The personal representative should pay valid estate debts from estate accounts, not from their own pocket, unless they choose to advance funds and later seek reimbursement.
- Watch deadlines. Probate claims often have short filing windows. If you miss deadlines, the estate might be bound by a filed claim or lose the chance to object.
- If the debt was sold, ask for the chain of assignment. Debt buyers sometimes add improper fees or show inaccurate balances.
- If a creditor insists on immediate payment and the estate needs time to verify, offer a short, reasonable extension while you gather documentation and consult the probate court if needed.
- Use certified mail or a delivery service that provides tracking when sending objections or requests for verification. That proves the creditor received your communication.
- When in doubt, consult the probate clerk at the local Michigan probate court for procedural questions, and consider a short consultation with a probate lawyer for strategy.