Detailed answer — step‑by‑step guide under Missouri law

1) Identify and notify creditors

After appointment, the personal representative must take an inventory of the decedent’s debts and assets and give any required notices to known and unknown creditors. Missouri law provides the statutory framework for administration and creditor claims; use the Missouri Revised Statutes and the probate court’s local procedures to confirm required notices and timelines (see Missouri Revisor of Statutes: https://revisor.mo.gov/).

2) Gather documentation and evaluate each claim

For each claim, request or assemble:

• the original contract, invoice, or billing statement;
• proof the debt was owed at the decedent’s death;
• evidence of any payments or setoffs; and
• information about security interests (mortgages, liens) and priority (secured vs. unsecured).

Verify whether the claim is timely filed under statutory notice periods and whether it was presented in the manner required by Missouri probate procedure.

3) Determine the estate’s ability to pay

Before offering settlements, determine whether the estate is solvent (assets exceed debts) or insolvent. If insolvent, Missouri law governs the order in which claims and administration expenses are paid; the estate may not be able to pay unsecured creditors in full. That priority and the estate’s cash flow shape realistic settlement offers.

4) Assess legal defenses and the claim’s strength

If a creditor’s claim is disputed — for example, for incorrect amounts, statute of limitations issues, or because the debt belonged to someone else — the representative can use those weaknesses to negotiate a lower payoff. Keep concise written notes of disputed facts, documents that undermine the claim, or legal defenses.

5) Open a negotiation — practical tactics

Common negotiation steps the personal representative (or counsel) may take:

• Request a full payoff statement and supporting documents in writing.
• Start with a written settlement offer (e.g., a percentage of the claimed balance or a fixed lump‑sum payment) and a deadline for response.
• Explain estate limitations—lack of liquid assets, competing higher‑priority claims, or weaknesses in the creditor’s proof.
• Consider structured payments (installments) if the creditor prefers more than a reduced lump sum.
• Offer a release in exchange for payment — a written settlement agreement that releases the estate and the personal representative from further liability on that claim.

6) Drafting the settlement and releasing the claim

If the creditor accepts an offer, document the agreement in writing. A proper settlement should include:

• the parties’ names (creditor and personal representative on behalf of the estate);
• the amount to be paid and the payment schedule;
• an explicit release of the estate for the settled claim upon payment;
• a statement that payment fully satisfies the creditor’s claim against the estate; and
• signatures of authorized representatives.

Keep the original settlement with estate records and provide the creditor with a copy. If the estate is open in court, you may need to file the settlement or obtain court approval (see the next section).

7) When court approval is required or advisable

Some settlements require probate court approval, or the court may need to approve distributions when the estate is insolvent, contested, or when the settlement affects the rights of heirs or other creditors. If a claim represents a significant portion of the estate, or if you are settling a disputed claim over objection, get court approval or confirm with probate counsel whether you can close the estate without a hearing. Check local court rules and the Missouri statutes for procedures governing allowance, disallowance, and settlement of claims (see Missouri Revisor of Statutes: https://revisor.mo.gov/).

8) Accounting and distribution

After settlements and allowances, the personal representative must account for payments and distribute the remaining assets according to the will or Missouri intestacy rules. Record settled claims on the estate accounting and retain settlement documents for the statutorily required period.

9) When to involve an attorney

Consult probate counsel if claims are large, if the estate is insolvent, if claims are contested, or if you suspect fraud. An attorney can draft settlement language, advise whether court approval is necessary, and represent the estate in creditor disputes.

Hypothetical example

Suppose an estate holds $30,000 in cash and has two creditor claims: a secured creditor with a $25,000 mortgage against a vehicle and an unsecured medical bill for $20,000. The personal representative confirms the mortgage and negotiates with the hospital. The hospital agrees to accept $8,000 as a full payment because the estate has limited funds and the unsecured claim carries lower priority. The representative documents the settlement, pays $8,000, obtains a release, and uses remaining cash for administration costs and to satisfy the secured creditor according to its lien.

Important Missouri law references

Missouri statutes and local probate rules govern notice to creditors, claim filing deadlines, allowance and disallowance of claims, and court involvement. For statutory text and current provisions, consult the Missouri Revisor of Statutes at https://revisor.mo.gov/. For court forms and local probate procedures, check the probate court website in the county where the estate is being administered.

Helpful Hints

• Act quickly: publish required notices and track filing deadlines so claims aren’t later asserted after you finalize distributions.
• Keep everything in writing: requests for verification, offers, acceptances, and final releases protect the estate and the personal representative.
• Prioritize secured claims and administration expenses: secured creditors and admin costs often have legal priority over unsecured debts.
• Use realistic settlement offers: offer a fair but firm percentage or lump sum based on estate solvency and claim strength.
• Retain proof of payment and signed releases in the estate file for the statutory retention period.
• When in doubt, consult probate counsel before settling large or contested claims or before closing an estate with unresolved claims.