Even if the following seems extremely client focused, I am a fellow freelancer. First acknowledge that a client pays you to produce something, he finds valuabl

Even if the following seems extremely client focused, I am a fellow freelancer. First acknowledge that a client pays you to produce something, he finds valuable. He does NOT pay you to spend x hours programming... (even if you bill by the hour). The milestone based payment is for your benefit (so that you have a steady cashflow, and that your risk of him not paying goes down towards completion). The client really only cares about one of the milestones... the last.. (or at most a few, that enables him to do stuff with the software he wanted). That you completed 50% of the milestones might be either something useful to him, or not. Even if he has access to the source code you already wrote, chances are, that any new contractor wants to start over from scratch (I would). So from his perspective, he paid you 3,000 dollars and you delivered nothing (worthy to him). No wonder he is unhappy. 3k$ may be pocket change for him, or it may have killed his project forever.. As for options. First of all, don't run from him, that only makes stuff worse. If possible, set up a meeting in person (that is gonna suck for you, but it really makes a difference). Tell him, honestly, what went wrong. As for the expanding requirements, try to agree to share the blame for that. Most of the other stuff is on your shoulders only, and you have to accept the blame for that. Apologize unconditionally, except for the expanding requirements. Now, it is time to look forward. Offer him to complete the project, or offer him some refund if he won't let you complete it. Ideally you should offer him close to a full refund, but you probably don't have cash for that. If the project is completed by somebody else and you cannot pay anything back, offer him to do something else as a freebie... And most important of all, learn from the experience. As much as you depend on the clients to pay you on time, the clients depend of you to deliver something useful. For most clients (especially not steady businesses) they have allocated something like three-quarters of all their money to you, and they probably cannot raise more... Don't take on project you know will be hard/impossible to finish due to time or skill constraints WITHOUT being frank about it... I know it probably looks bleak now, but if you are any good you will have a long career in front of you. The soft skills (negotiations, keeping your word etc) matters as much as the hard skills (programming or what ever). Especially your word, do what you can to keep it! and if you are in risk of not keeping it, tell the client up front. You client might accept a slightly reduced version to hit an important date and then get the final version slightly later - but you don't know if you don't communicate..