You can talk to the local police and see if they would be willing to pursue charges for "theft of service" but it is unlikely they will assist under the facts you've set out.
The first thing you should do is invest in a lawyer to draw up a form contract
for payment every time you start work on a car. The contract should include language that establishes a "mechanics lien" on the vehicle and allows you to hold the car until payment is made.
You can also use a collection agency to collect the debt, although their success rate isn't very high, particularly in today's economy.
The only other solution that you have is to file suit, either by yourself or through the use of an attorney. In the situation you describe you can take that person back to court and state that they breached two contracts, the first one when they didn't pay initially and the second one when the reneged on the payment arrangement. If you decide to use an attorney those fees are recoverable in a breach of contract case.
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