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You are probably out of luck. I had a similar "learning experience" years ago but mine cost me over $13K. Here are 2 things I do to mitigate the risk of this so

You are probably out of luck. I had a similar "learning experience" years ago but mine cost me over $13K. Here are 2 things I do to mitigate the risk of this sort of thing: (1) Never lend the client more than 2 weeks (80 hours) pay. Make payment due in 10 days with a step to a higher rate after that. I think for my next gig, I will spec the rate at the higher figure with a discount for paying within 10 days i.e. $200hr or $150hr if paid within 10 days. (2) Draw up a client services contract. I scoured the internet and drew up a rough version of what I wanted along with a list of goals [example: "I don't want any liability"] and sent them to my lawyer to draw up a contracting agreement. I think it cost me $6-700. The beauty of this is that you can reuse it for multiple clients. Lets see how this might have avoided your current situation. For one thing, you wouldn't have gotten to $8K outstanding before you stopped working. Your contract would also have specified that disagreements be settled in your home state. $5K is the limit for small claims in NY.

TylerE 11y ago
Actually, by your own standards he easily could have. 80 hours at even $100/hr is....$8k.
- chrisbennet 11y ago
  True. I almost never work 40 billable hours in a week at least not for the same client.
chiph 11y ago
You might also look at offering 2/10 Net 30 terms. Which means if they pay within 10 days they get a 2% discount, otherwise they must pay the full amount at 30 days. They're motivated to pay early to take advantage of the discount, and you're willing to only take 98% because money now is better than money later.
- chrisbennet 11y ago
  You need to make the incentive a lot bigger. Examples: - If your rate is $150hr for 10 day net. 30 day net is $200 hour. - If you are charging a $50K license fee if paid within 10 days, make it a $60K license fee if paid withing 30 days. Client: "Oh, but I don't think we can turn that around in 10 days" You: "I totally understand, I can work on retainer if that's easier."
brudgers 11y ago
Payment due on receipt of invoice is better. Nobody except an enterprise really needs ten days to cut a check. With established clients, just match your invoice to their AP cycle, e.g. if they write checks on the 15th and 30th, invoice on the 14th and 29th...ok so it's a day instead of immediately. Retainer payable against final invoice is even better, then you're never upside down. And why should you be if being upside down is unacceptable to the client?

TylerE 11y ago

Actually, by your own standards he easily could have. 80 hours at even $100/hr is....$8k.

chrisbennet 11y ago
True. I almost never work 40 billable hours in a week at least not for the same client.

chiph 11y ago

You might also look at offering 2/10 Net 30 terms. Which means if they pay within 10 days they get a 2% discount, otherwise they must pay the full amount at 30 days. They're motivated to pay early to take advantage of the discount, and you're willing to only take 98% because money now is better than money later.

chrisbennet 11y ago
You need to make the incentive a lot bigger. Examples: - If your rate is $150hr for 10 day net. 30 day net is $200 hour. - If you are charging a $50K license fee if paid within 10 days, make it a $60K license fee if paid withing 30 days. Client: "Oh, but I don't think we can turn that around in 10 days" You: "I totally understand, I can work on retainer if that's easier."

brudgers 11y ago

Payment due on receipt of invoice is better. Nobody except an enterprise really needs ten days to cut a check. With established clients, just match your invoice to their AP cycle, e.g. if they write checks on the 15th and 30th, invoice on the 14th and 29th...ok so it's a day instead of immediately. Retainer payable against final invoice is even better, then you're never upside down. And why should you be if being upside down is unacceptable to the client?