What you have here is an INSOLVENT estate - meaning that there are not enough funds in order to pay off bills.  Your friend still has to file a Probate Proceeding to give creditors the opportunity to make claims on the estate, even though there is nothing there.  There ar certain priorities given even when funds are low: Generally, the priority of paying probate claims in New York is as follows:Funeral and burial expensesAdministration expenses and attorneys’ feesEstate and personal taxes owed by the decedentMedical bills relating to the decedent’s death or any illnesses resulting to the decedent’s deathJudgmentsSecured debts such as mortgages or car loansUnsecured debts such as credit card billsYour frined should make a claim in the estate for the funeral expenses.  He will get that money back.  The clerks of the Surrogate's Court are the nicest people and will often help him, although they can not give him legal advice. Good luck.