The prospect of losing money can make people do all sorts if crazy (and illegal or dangerous) things. I don't have a whole lot of experience with it. Been beat a few times, and I just have to walk away.
I had one incident 18 years ago the essentially put me out of business doing remodeling. I had a contract to be prepaid in 5 draws. When the time came for the 3rd draw, the people were already running out of cash.
I decided to be a nice guy and work with their lender to keep going on the job and wait for payment until the house was far enough along to get a new appraisal and refinance.
That slowed down the progress on their house because I had to go make the money elsewhere and then come spend it on their house.
They waited until I was about 90% done with the job, then sent me a certified letter saying I was fired. They refused to pay me any of the money they owed, and they locked up all my tools and wouldn't let me in to get them.
I was completely beside myself.
I tried everything I could think of the get tgem to pay me something. And at least let me have my tools back so I could go work somewhere else. Nada.
After about 2 weeks, I was literally in tears.
I was completely hopeless. And to be honest, it had me on the verge of crazy.
I had 2 thoughts that really changed everything.
The first one: I wonder how long they would miss their toddler before they come up with my tools and some cash?
Second thought: I have to walk away. I can't let money get me so out of sorts that I would contemplate something so heinous.
So I walked away. It was one of the worst times in my life. But y'know what? I got through it. And it made me different.
How do I handle someone who doesn't pay a couple hundred dollars? It's happened a few times. I thank the good Lord that I can afford to walk away, and I do just that.