Why does it surprise anyone when people do things like this?
First, if your contract says 15 days net, why'd you let him get so far into arrears? When a payment's late, you stop working until the bill's paid. End of story. You don't keep working and racking up unpaid back charges. Do that, and you'll likely never be paid.
Second, as long as you're not lifting clients off this guy (and assuming you haven't signed some sort of brain dead noncompete agreement), it's not the slightest bit his business that you've taken on other clients. There's no reason for him to even know.
So to answer your question about why people like him do this: because folks like you let them. No one forced you to work with the guy; there was probably every indication that a problem was coming; when the problem became obvious, you kept working. Only now that he's 90 days in arrears (six times your payment term), are you looking into taking action. I'm sorry your family is suffering for it, but it should never have gone this far.
At over nine grand, you can't just write it off. That's stoned. I'd take it up with a good collection agency, and then consider legal action if that doesn't work. I also sincerely hope for your sake that your contract is rock solid and that you have complete records of everything. If you do, go to war - it'll likely be paid before it goes to court.
If you can't back it up, or your contract is a joke, you may be screwed. Take it as a learning experience, and don't make the same mistakes again.
Oh - and I agree, edit out the names. Bad business.