Detailed Answer — How to verify or contest a creditor’s payoff quote on an estate debt (Montana)

Short answer: If you are administering an estate in Montana or are an heir/beneficiary, you should (1) collect the estate and loan documents, (2) ask the creditor for a written, itemized payoff statement, (3) check the math and legal basis for each charge, (4) confirm the creditor’s claim fits Montana’s probate rules and any statute of limitations, and (5) if you disagree, formally dispute the claim in writing and, if necessary, file an objection in the probate court. Act quickly — probate deadlines matter.

What to know first — basic Montana law context

In Montana, probate and claims against an estate are governed by the Montana probate statutes (Title 72). Executors or administrators must notify creditors and follow statutory procedures for receiving, allowing, or disputing claims. For an overview of Montana’s probate statutes, see the Montana Code (Title 72 – Probate, Estates and Fiduciaries): https://leg.mt.gov/bills/mca/title_72/. For statutes of limitations or timing issues, consult Montana’s civil practice titles: https://leg.mt.gov/bills/mca/title_27/.

Step-by-step: Verify a creditor’s payoff quote

1. Get formal documentation from the creditor in writing.

   Request an itemized payoff statement that shows: principal balance, daily interest rate and how interest is calculated (date through which interest runs), late fees, collection or attorney fees, escrow advances, insurance charges, and any payments or credits applied. Ask for supporting documents: the original loan agreement, assignments of the note (if sold), and proof of the creditor’s authority to make the claim.

2. Gather estate and loan records.

   Collect the decedent’s loan statements, bank records showing payments, the mortgage or security instrument, insurance records (e.g., hazard or life-insurance proceeds), the death certificate, and letters testamentary or letters of administration. These let you verify whether payments went missing or whether insurance or other sources should offset the balance.

3. Confirm the creditor’s identity and standing.

   Ensure the payoff quote is from the current holder of the debt. If the loan was sold or assigned, request documentation showing the chain of title. If the creditor cannot prove they own the debt or have authority to collect, you can dispute the claim.

4. Check math and contract terms.

   Recompute interest using the loan’s stated rate and known payments. Verify whether default interest or acceleration was triggered and whether the creditor legally applied fees under the contract. Watch for double-counting or fees that exceed the contract’s allowances.

5. Look for offsets and credits.

   Confirm whether insurance proceeds, payments made after the last statement, tax payments, or sale proceeds should reduce the payoff. Also check if the estate already paid portions of the debt that the creditor hasn’t credited.

6. Compare secured versus unsecured status and priority.

   Determine if the debt is secured by estate property (mortgage, deed of trust). Secured creditors often have remedies against collateral rather than a general estate claim. Understanding whether the creditor’s remedy is foreclosure or a probate claim affects how much the estate actually owes.

7. Check timing and statutory requirements for claims.

   Probate has deadlines for presenting claims. Executors must follow Montana’s notice-to-creditor rules and allow creditors to present claims within the statutory window. Missing those deadlines may bar a claim. See Montana probate statutes for claims procedures: Mont. Code Ann., Title 72.

Step-by-step: Contest a payoff quote or claim

1. Send a written dispute to the creditor immediately.

   State the specific items you contest, attach documentation, and request a corrected, itemized payoff. Keep copies and send by a trackable method (certified mail or email with read receipt).

2. Negotiate informally if appropriate.

   Some creditors will correct mistakes or accept an agreed payoff after documentation. Consider proposing a reasonable compromise if the estate’s assets are limited.

3. File a formal objection in probate court if necessary.

   If the creditor files a claim in probate and you believe it is incorrect or barred, file a written objection with the probate court before the court’s deadline. The probate judge will resolve allowance or disallowance of the claim. Follow Montana’s probate claim procedures under Title 72 for the exact process and deadlines: https://leg.mt.gov/bills/mca/title_72/.

4. Defenses to assert.

   Common defenses include: lack of standing (creditor can’t prove ownership), incorrect calculation of interest or fees, payments or offsets not credited, claim filed after the statutory deadline, or the debt was satisfied previously. If the creditor sues outside probate, assert these defenses in court and consider counterclaims if appropriate.

5. Use motion practice or a trial if dispute persists.

   If factual issues remain, the probate court may hold a hearing or trial. You can ask the court to compel the creditor to produce records or to exclude certain charges.

When to get a lawyer

Consider hiring an attorney if the disputed amount is large, if the creditor threatens foreclosure on estate property, if complex questions of priority or assignments arise, or if deadlines approach and you are unsure how to object. An attorney can help prepare filings, compute correct payoffs, and represent the estate in court.

Practical checklist: what to request from the creditor in a payoff demand

• Written, itemized payoff showing principal, accrued interest (with daily interest rate), fees, and per‑day interest calculation date.
• Copy of the original promissory note and security instrument (mortgage or deed of trust).
• Assignment or sale documents if the creditor is not the original lender.
• Payment history showing all payments applied and the dates.
• Explanation of any default acceleration or attorney fees claimed and citation to contract terms allowing those charges.

Helpful resources and Montana statutes

Montana probate statutes provide the legal framework for claims against estates and the duties of fiduciaries. See the Montana Code, Title 72 (Probate, Estates and Fiduciaries) for claim and administration rules: https://leg.mt.gov/bills/mca/title_72/. For timing and limitation issues, see Montana civil practice provisions in Title 27: https://leg.mt.gov/bills/mca/title_27/.

Disclaimer

This article is informational only and not legal advice. It does not create an attorney-client relationship. For help applying Montana law to your specific situation, consult a licensed Montana attorney who handles probate and creditor claims.

Helpful Hints

• Act quickly — probate deadlines can bar claims permanently.
• Always get payoff quotes in writing and date-stamped; verbal quotes are easy to dispute.
• Keep a clear paper trail: dates, amounts, and sender/recipient details help in court disputes.
• Verify who currently owns the debt — the servicer on the last statement might not be the true creditor.
• Don’t assume a secured creditor’s quoted balance equals what the estate must pay; foreclosure vs. allowance in probate are different remedies.
• If possible, obtain a short payoff period (e.g., payoff good for X days) to prevent surprise accruals while you review.
• When in doubt about major disputes, get legal help — an attorney can preserve rights and present objections correctly.