Thanks for the advice so far guys. I've been very fair with the client so I doubt it is a personal issue. It may be a financial one but If I'm completely honest, it seems like he's just taking the 'Art of War' advice a little too seriously and using it in the wrong context. I do have a contract in place, but we are in different Countries - so I'd have to look into how that would work. I'm in Canada, he's in the U.S.

We teach people how to treat us. Take ownership. Sure, it's a Dr. Philism... The Young Client needs to be reminded of your your specific terms & payment expectations, best explained 1:1. Only engage the lawyer as a last resort, knowing you'll have lost a client relationship.

Hopefully there is a contract in place for this project. See what your lawyer says. There probably isn't a family emergency, he's just broke.

So I take it this is the first time you've not been paid by a client.

One. Do you have a contract?

Two. Are you in the same State, Country as he is? (This will be important in your collection process)

Three. Did you deliver the product as specified in the contract?

Four. Is the amount he owes you less than $10,000.

Five. Did you contract with him personally?

If the answer is YES to all the above. Send him a notice that he is past due, you'll have to notice him and give him a reasonable amount of time to respond, say 30 days. You'll have to memorialize your communications. After that you can go to a small claims court and get a judgment and attach his assets. Depending on what he has you may get your outstanding balance in 3-4 years. In your notice make sure you let him know he breached his contract you'll be charging interest after 60 days overdue.

If your contract is with a corporation. Then you're just an unsecured creditor. You can still go to court but the best you could get is a judgment against a corp which main asset is your software.

You can sell your invoice to a collection agent, but you'll be lucky to get .10 on the dollar.

Seeing a lawyer will only put you more in the hole.

My advice is to tell him that he's breached his contract and with that your agreement not to compete with him. Also let him know that you'll be selling the source on the web to recoup the loss from his breach. He may be a little more reasonable if knows he has competition.