Short answer

If you are the personal representative (executor) or an interested heir in Tennessee, you should: (1) gather the estate and loan documents; (2) ask the creditor for a written, itemized payoff statement; (3) compare the payoff to the loan contract and estate records; (4) raise a written dispute with the creditor and the probate court if needed; and (5) consider negotiation, mediation, or filing a formal objection in probate court. Tennessee probate law controls how creditors present and prove claims against an estate, so act promptly and keep records of every communication.

Detailed answer — step by step under Tennessee law

1. Understand the legal role and timeline

When someone dies, the decedent’s debts become claims against the estate. The person appointed by the probate court (personal representative) manages assets and pays valid claims out of estate funds or proceeds from asset sales. Tennessee probate statutes and court procedures set deadlines and rules for presenting, allowing, and disputing claims. For an overview of Tennessee probate statutes, see the Tennessee Code, Title 30 (Probate and Administration): https://www.capitol.tn.gov/legislation/statutes/30.html. You may also consult the Tennessee Courts site for local probate procedures: https://www.tncourts.gov/.

2. Collect the necessary documents

Before you can verify a payoff quote, obtain the following (if available):

• Original loan agreement, promissory note, mortgage or security deed;
• Most recent periodic statements and an account transaction history;
• Notice of default, acceleration, or any demand letters;
• Death certificate and the letters testamentary or letters of administration issued by the probate court;
• Inventory or appraisals of estate assets;
• Any prior payoff statements or payoff demands from the creditor.

3. Ask the creditor for a written, itemized payoff statement

Request a written payoff that itemizes principal, accrued interest, daily interest rate or method of interest calculation, late fees, collection charges, attorney fees (if contractually permitted), prepayment penalties, and the date through which the amount is calculated. Ask the creditor to show the contract provision that authorizes each fee or charge. Always request delivery by certified mail or email and keep copies and delivery receipts.

4. Verify arithmetic and contract terms

Compare the creditor’s itemization to the loan contract:

• Confirm the outstanding principal balance from the loan ledger.
• Check the interest rate and whether interest should continue after death under the contract.
• Confirm whether any fees or attorney costs are allowed by the contract or Tennessee law.
• Ensure the payoff date used by the creditor matches when the estate expects to pay; creditors sometimes add daily interest.

5. Look for common errors or improper charges

Common problems include duplicate charges, fees not authorized by the loan, interest calculated from the wrong date, or charges for services not performed. Also check whether the debt is secured by estate property (mortgage or deed of trust). If the debt is secured, the creditor may have a separate remedy against the collateral; that affects how the estate should handle payoff or foreclosure.

6. Send a written dispute and request verification

If you find a discrepancy, send a clear, written dispute to the creditor and to the estate’s file. Describe the specific items you contest, attach supporting documents, and request corrected itemization. Use certified mail (return receipt) or another verifiable delivery method and retain copies. This helps create a record if you must later file an objection with the probate court or defend against a creditor lawsuit.

7. Negotiate, mediate, or settle

Often creditors will reduce an amount or accept a compromise to avoid litigation or delay. The personal representative has authority to negotiate claims; however, some settlements may require court approval depending on the estate size and local probate rules. Try to obtain a written settlement agreement that releases the estate from further liability when the agreed amount is paid.

8. File a formal objection or contest in probate court if necessary

If the creditor will not correct an error or will not accept a reasonable compromise, the personal representative (or an interested person) can contest the creditor’s claim in the probate court that is administering the estate. Tennessee probate procedure and local rules govern how to file objections, present evidence, and schedule hearings. The estate’s file should show the claim, the objection, and your supporting records. See Tennessee Code, Title 30 (Probate and Administration) for statutory procedures: https://www.capitol.tn.gov/legislation/statutes/30.html.

9. Prepare for court: evidence and defenses

To contest a payoff quote in court, assemble clear documentary evidence: the original loan, full account ledger, payoff statements, correspondence showing your dispute, and any proof of improper fees. Possible defenses or challenges include: incorrect balance calculation, unauthorized fees, statute of limitations defenses, payment already made, or fraud/identity issues. Present calculations and a concise timeline.

10. When to consult an attorney

Consult a Tennessee attorney experienced in probate and creditor claims when: the claim is large relative to estate assets; the debt is secured by real property; the estate lacks sufficient liquid assets; the creditor sues; or the legal issues (e.g., complex payment history, potential fraud, or competing claims) exceed your comfort level. An attorney can file formal pleadings, represent the estate at hearings, and negotiate protective orders or settlements.

Helpful hints

• Act quickly: probate claim windows and creditor remedies may be time-sensitive. Start verification as soon as the claim arrives.
• Always get payoff figures in writing and note the date the payoff amount is calculated through (daily interest can change totals).
• Keep a careful paper trail of all communications and receipts; courts rely on documentary proof.
• Don’t mix personal funds with estate funds. Use estate bank accounts for payments and document approvals in the estate file.
• If a creditor threatens foreclosure on secured property, seek immediate legal advice—timing and local foreclosure rules matter.
• Consider using a certified public accountant or forensic reviewer for complicated ledgers or long account histories.
• If the estate is insolvent (debts exceed assets), consult counsel early about priorities and statutory procedures for paying claims.

Quick sample dispute letter (short form)

[Date]
[Creditor name and address]

Re: Account #[account number]; Decedent: [name]; Payoff quote dated [date]

Dear [Creditor],

I am the personal representative/representative of the estate of [name]. On [date] you provided a payoff quote in the amount of $[amount]. I dispute the following items as inaccurate or unsupported: [briefly list items]. Please provide a complete, itemized ledger, the contract provision supporting each charge, and a corrected payoff figure with the date through which the payoff is calculated. I enclose copies of the decedent’s relevant account statements and the letters testamentary. Please respond in writing within 14 days. This is not a waiver of any rights the estate may have to contest this claim.

Sincerely,
[name and contact information of personal representative]

Where to learn more

• Tennessee Code (Title 30 — Probate and Administration): https://www.capitol.tn.gov/legislation/statutes/30.html
• Tennessee Courts (general information and local probate court contacts): https://www.tncourts.gov/