I know one guy, a reasonably close acquaintance. He thought he was quite well set and could afford to push things. He did some consulting role and on one project he bought the client a few servers and infrastructure kit as well as part of the whole package consultancy deal. Client just didn't pay after the first invoice (month bill, month to pay terms) citing end-of-year accountancy system issues delaying the setting up of the account. Client didn't pay at the end of the second invoice terms formally querying some issues on the invoice but promising to pay. Client didn't pay at the end of the third invoice again querying some issues but because they were so big my friend thought it wasn't a problem and kept working. At the end of the fourth invoice terms period he still didn't get paid and formally started dunning the invoices and stopped providing services. This caused the client to allege breach of contract and complete forfeiture of any due payment due to the losses the client would have to incur finishing the project. The outstanding balance was £40,000 in billed time plus the hardware he supplied, he loaned his own company the money from his personal reserves. He sued immediately, the judge refused a summary judgement due to a very complex contract and situation and set a full hearing for a decent time in the future.
He went bankrupt before the hearing, his company was seized by the Official Receiver who settled with the client for just enough to settle all the bankruptcy debts and annul the bankruptcy (I think that's what it's called when the OR cancels the bankruptcy due to full payment). Thankfully, he got to keep his house but lost his car, his company, his savings and is struggling to get work due to confidence issues. The OR settlement with the end-client had a confidentiality agreement in it that bound him as well or he'd be naming the company publicly.
The moral of it all is that you can have a war chest you think is plenty but a few daft "investments" will see it all going down the gutter and you with it.
He went bankrupt before the hearing, his company was seized by the Official Receiver who settled with the client for just enough to settle all the bankruptcy debts and annul the bankruptcy (I think that's what it's called when the OR cancels the bankruptcy due to full payment). Thankfully, he got to keep his house but lost his car, his company, his savings and is struggling to get work due to confidence issues. The OR settlement with the end-client had a confidentiality agreement in it that bound him as well or he'd be naming the company publicly.
The moral of it all is that you can have a war chest you think is plenty but a few daft "investments" will see it all going down the gutter and you with it.
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