A contract between two individuals is legally binding. It doesn't matter whether you are a business or not. I don't know what your contract looks like, but her signature agreeing to specific terms is legally binding. The problem will be that lawyers often charge $300 + per hour, so it will cost you more than the $500 she owes you to collect it. Not sure about just going through small claims court, but that is probably an option. Getting legal advice might not be worth it due to the cost... unless you have a family member who is a lawyer and will let you ask him/her for free. Don't we all wish we had a lawyer in the family...