In September 1980, Mary Ellen Berry and her elderly mother moved to the District from Collingswood, N.J., to bury an uncle and settle an estate estimated to be worth $120,000.

Last week, the two women went home broke, with nothing more than a $400 marble-topped coffee table and more than a few bitter words about the lengthy legal process they say left them with nothing.

"I very much wish I hadn't come down here," Berry said last week, taking a break from packing boxes in the Southeast Washington home her uncle once owned free from mortgage. "It's all so complicated. . . . It doesn't seem right."

But lawyers involved in the case said Berry's inherited estate was not the victim of unfair District laws but of a slumped real estate market and the fact the uncle carried no life insurance.

And they say the two women, now living off the mother's social security pension, will ultimately receive close to $50,000 as a promissory note for their house comes due over the next five years.

"She believed when she came down here that she would take the money and be on her way," said Berry's lawyer, Alfred S. Fried. "But, no estate works that way. Especially no estate with debts."

Berry's uncle, John J. Wilkinson, a retired federal worker, died at age 73 with $1,000 in a savings account and $12,000 worth of debts to banks, a credit card company and department stores. He had no life insurance, but owned his O Street SE home, appraised at $114,000.

Under District law in effect at the time, the courts ordered the sale of the home to pay off the debts. Berry said it was a costly, cumbersome process since the house and its contents had to be appraised three times.

A newer law, which went into effect in January 1981, allows title of the property to be transferred to the executor of the estate and eliminates the need for repeated appraisals, said Fried.

"It is a little more streamlined," he said. "But either way, the house would have to be sold if there wasn't enough money to cover the debts of the deceased.

"If her uncle had carried life insurance, then the debts would have been taken care of," he said. "But you can't look at this as an 'only if' situation."

The house languished on the real estate market for over a year until July 1982, when the courts sold it for $70,000 to the only bidder who came forward.

In hindsight, says Berry, she should have paid off the $12,000 debt outright by dipping into her savings and selling her uncle's car and antique furniture. But the savings went to pay funeral expenses. She sold the 1977 station wagon for $1,150 and used those funds to pay real estate taxes. The value of the antiques was questionable.

"I never saw any Chippendale highboy on the appraiser list," says Fried.

Instead Berry, 43, found a job with the Board of Trade's Human Development Bureau and shouldered the expenses of a $100,000 house on an $11,000 salary.

"There were sewer bills, gas bills, taxes, water, upkeep," said Berry.

After the bureau where she worked was closed, Berry took another job at a hotel, then quit for health reasons. Her unemployment benefits ran out months ago. Since then, Berry, her 21-year-old daughter by a former marriage and her mother, aged 83, have been living off the latter's social security.

"Nothing went wrong with the process except that the housing market was poor and she lost her job," said Fried. "Life may seem unfair."

Berry contacted her New Jersey congressman and the District's corporation counsel, but spokesmen from both offices said there was little they could do for the women.

Berry said she will see nothing of the $20,000 down payment made by the buyer on the house she must now vacate. Fried agrees.

Most of the money will go to pay off the debts still outstanding. Realtor fees, transfer taxes and court costs will take the rest. A $1,000 legacy made by Wilkinson to a church must also be paid.

Berry, now in debt herself, was returning with her mother to New Jersey after the estate was finally settled last week.

"I don't know how we're going to live in New Jersey," said Berry. "This is such a mess. . . . I wish I had never quit my job to move down here. If I could do it again, I wouldn't move down here."

Fried said the $50,000 still owed by the man who bought the house is due within five years. Some of that money will go to court costs and inheritance taxes but he said "the bulk" will go eventually to Berry and her mother, as Wilkinson's heirs.

"If they will just be patient," he said.