... a quick Google search shows that the max you can sue for in small claims court in NYS is $5000 and it may be as low as $3000 based on where you live.
His friend moving out of state will only get a temporary reprieve. If the landlord decides to pursue it, he'll win a default judgement. If the friend is ever employed again in NYS the debt will come back to life, possibly with interest and collection charges.
Taking the $6900 as a business loss is an accounting function and has nothing to do with their ability to continue collection efforts. They'll just have to show it in the accounting if they are able to eventually collect.
Not that it's any of my business but I see several other problems in this post:
Your son signed a lease, a legal contract, - why does he think it's okay to not fulfill the terms he agreed to?
He's 25 and only earning ~$8000 as a seasonal painter - it's past time to get a marketable skill and start being an adult and either earning, or preparing to earn, a living.
Why did you allow him to live with you after he walked out on a contract? At this point are you enabling him to avoid becoming an adult?
The unpaid medical is unfortunate but can be dealt with by working with the hospital - that will help his credit rating at least a little bit.
My unsolicited advice -- Tell your son to honor his word (contracts), pay his bills, move out of Daddy's house, figure out to support himself and, eventually, a family.
Again, I AM NOT A LAWYER, and I didn't mean to offend.
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