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I am not a lawyer.

If you have to hire a lawyer, yes your most likely have a problem because legal fees will very very quickly become much more than what your owed. If you feel like punishing this person for personal satisfaction then go ahead. S
Someone may take the case on contingency (i.e. a cut of whatever you get) if there is the chance of punitive damages over and above what is owed. If you are on decent terms with a lawyer consult with them. If you can get someone to do this then it is most likely a slam dunk given what you've said.

However it sounds like you only care about the money, if your willing to sue (with yourself as a lawyer) it may be worth your time and effort. If the company was "sold" then the new owners have responsibility to pay you for that time. If the companies "assets" were sold then the previous owner's company would owe you the funds, and if they shut the old firm down by taking out all the money without paying all of the debits more than the $1000 could be recovered. The federal goverment being involved may create some other situations i.e. they might pay you or prevent the old people from ever getting their business again.
If the company was sold, there is money somewhere you can attach to. Additionally, you KNOW the owner of the company DOESN'T want to hit bankruptcy otherwise they would have told you "sue me I don't care". You have been given some valuable information.
They see something to lose by filling bankruptcy, hence the letter trying to avoid the situation. The fact that you have a smaller amount of money and that the owner has now TOLD you now by writting the letter that they want to keep OUT of bankruptcy gives you some leverage.

Like any good advice, this all depends on specifics. State laws, your contract, and ability to document that your actually performed the work will greatly change the merits of the case you have. Also, if your time is valuable and scarce then it isn't worth it to do much on pure economic terms.
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