Start up client can't pay at all. Is continuing work for them the only option?
My team and I have been working for a client that's an incorporated start up company owned by several founders. The client stopped paying us because they ran out of money. So right now, they owe use $80k CAD. I've already paid my team (salaried employees and sub-contractors) $55k for doing the work. So to me, it sucks because I basically just dug myself into a hole, and the client can't help me out.
I talked to the client and told them if they don't pay, then I'll have to find a 3rd party such as a collection agency or lawyer to resolve the situation. The client told me I can do that, and of course I'd win the legal case because we all agree on the amount owed. But nothing good would come of it because they still have no assets/money to pay.
The client then said it is in my best interest to keep working for them to help their company get off the ground. Only if the company starts making money can they pay me the $80k CAD. In the meantime, they'll pay enough to at least make sure the debt doesn't accumulate.
So if the client really has no assets at all, does that mean the only hope of me ever seeing even a single penny of that $80k is to continue to work for them?
** I won't get into the details of how this $80k accumulated...suffice to say, these clients were great clients for 2 years always paying ahead of time. Then this stupid situation happened.