My SO has her own story - she ran into a guy whom she later found out does it as a policy: hires people, never pays, threatens to sue them if they publish their story. Her lawyer told her to just forget about it.
It's then that find out the limitations of our legal system: if the client is international, forget about it. If they're out of state, prepare to deal with an expensive legal process taking place where the laws may not always favor you. And even if it's local, and you won in a small claims court - good luck collecting.
I have periodic payments built into all my contracts, with the final payment taking place after acceptance tests, but before me surrendering all materials and code. I won't say this is a 100% bulletproof solution, but the alternatives suck.