Short answer

If you are handling an estate in South Carolina and a creditor provides a “payoff quote” (for example, for a mortgage, credit-card balance, medical bill, or other debt), you should (1) obtain an itemized written payoff, (2) check whether the claim was properly presented in probate, (3) verify the math, security interest, and priority, and (4) formally dispute or ask the personal representative to object and ask the probate court to resolve the claim if the payoff appears incorrect. Secured creditors (like mortgage lenders) often have stronger remedies than unsecured creditors; that affects negotiation and contest strategies.

Detailed answer — step-by-step under South Carolina law

1. Identify who can act and where claims belong

Only the personal representative (executor/administrator) or the probate court can allow or disallow creditor claims against an estate. If you are an heir or interested person, your route usually runs through the personal representative or directly to the probate court. For general information about South Carolina probate practice and forms, see the South Carolina Judicial Department’s probate page: https://www.sccourts.org/probate/. For the governing law on estate administration and creditor claims, consult the South Carolina Probate Code (Title 62): South Carolina Code – Title 62 (Probate Code).

2. Immediately get a written, itemized payoff statement

Ask the creditor for a written payoff statement that includes:

• Principal balance;
• Interest rate and per-diem interest (and the cutoff date used to compute interest);
• Itemized fees, late charges, attorneys’ fees, escrow shortages, or collection costs;
• Any rebate, insurance charge, or other non-principal items; and
• An expiration date for the payoff figure (payoff statements usually expire after a short period).

Do not rely on a verbal figure. If the creditor is a mortgage or loan servicer, request the payoff from the servicer or loan holder and confirm the escrow and per-diem amount so the payoff can be accurately calculated to the intended payoff date.

3. Verify the debt is an estate obligation and whether it’s secured or joint

Ask these questions:

• Was the obligation solely in the decedent’s name, jointly held, or secured by property of the estate (for example, a mortgage or vehicle lien)? Secured creditors can enforce security (foreclose or repossess) even if other unsecured claims go unpaid.
• Is the debt legally enforceable against the estate under South Carolina law (e.g., not already discharged in the decedent’s bankruptcy)?
• Are there co-signers or surviving joint obligors who remain personally liable?

4. Check the math, interest, and fees

Common payoff errors include wrong per-diem interest, duplicate fees, or fees incurred after the date of death that may not properly belong to the estate. Ask the creditor for an account history showing each charge, payment, and interest calculation. Confirm:

• Interest accrues at the contract rate and whether default interest applies;
• Any attorney fees are allowable under the contract or statute;
• Third-party collection fees were actually incurred and permitted by the agreement; and
• Whether the creditor applied payments correctly and didn’t double-charge.

5. Confirm whether the creditor has submitted a probate claim

Under the Probate Code, creditors normally must present claims to the personal representative. Ask the personal representative whether the creditor has filed a claim in the probate estate and request a copy. If a creditor has not presented a claim and the estate closed or distributed without resolving claims, the creditor’s ability to collect can be affected. Check Title 62 for the specific procedural rules that govern how claims are presented and allowed: South Carolina Code – Title 62.

6. Dispute the payoff in writing and preserve proof

If you find discrepancies, send a clear written dispute to the creditor that identifies the disputed items and requests corrected documentation. Send the dispute by certified mail (or similar) and keep copies of everything. Also provide a copy to the personal representative and the probate attorney, if any.

7. Use probate procedures to contest the claim if the creditor has filed it

If the creditor files a claim and you (or the personal representative) believe it is incorrect or not owed, the personal representative may formally object and ask the probate court to decide the claim’s validity. The court can:

• Authorize payment of part or all of a claim;
• Disallow a claim in whole or in part; or
• Order other relief such as an accounting or appointment of a guardian ad litem for disputed interests.

Procedures and deadlines for presenting and contesting claims are governed by the probate rules and the Probate Code—review Title 62 and local probate court rules or speak to a probate attorney for timeline specifics: https://www.scstatehouse.gov/code/t62.php.

8. Consider alternatives: negotiation, settlement, or motion to the court

Often estates negotiate with creditors to accept a reduced lump-sum payment or a compromise. If a secured creditor threatens foreclosure, consider pursuing a short payoff or a court-supervised sale of estate property to satisfy the secured debt. If negotiation fails, the personal representative can ask the probate court to resolve the dispute.

9. Investigate possible bankruptcy or other defenses

Confirm whether the decedent had a prior bankruptcy case that discharged some or all debts; a bankruptcy discharge can prevent creditors from collecting against the estate for discharged debts. Also review potential defenses such as statute-of-limitations issues, lack of standing, or errors in the creditor’s documentation.

10. When to involve an attorney or forensic accountant

If the debt is large, the accounting is complex, the claim is disputed, or a creditor is pressing for immediate action (e.g., imminent foreclosure or litigation), consult a probate attorney in South Carolina and consider hiring a forensic accountant. An attorney can file objections, represent the estate in court, and advise on fiduciary duties and distribution priorities under South Carolina law.

Helpful hints

• Always get payoff numbers in writing and note the payoff “as-of” date; many payoff quotes expire in days.
• Keep a full paper and digital file of statements, payoff letters, certified-mail receipts, and communications.
• Ask for an account ledger that shows all charges and payments from the account’s opening through the payoff date.
• Confirm whether a debt is secured (mortgage or lien). Secured claims have priority for the collateral and different remedies.
• Check for a bankruptcy filing by the decedent; bankruptcy can change or extinguish creditor rights.
• Make sure the personal representative follows South Carolina Probate Code procedures when allowing or disallowing claims; otherwise the estate and heirs could face liability.
• Send disputes and requests to both the creditor and the estate’s personal representative; both parties should know the issue.
• If the creditor threatens foreclosure or repossession, act quickly: some remedies are time-sensitive.
• Use certified mail or an equivalent trackable delivery method when sending disputes or documentation.