I'm very tempted to get the lawyers involved, but that will be expensive, take a long time and might not be worth it.
Sounds like you have a similar problem, at least Im not the only one.
I waived any late fees ( I didn't even mention them) and offered him bonuses if he finished within a certain date (he didnt but hes still demanding them).
Its amazing how angry he gets when I ask in the politest way possible that he show me some progress, even when he's 6 months late!
You don't need a lawyer for small claims court. You just pay the small fee(something like 20 bucks) and you get to present your case in front of a judge. And the small claims court case really won't take that much time. Chances are, you'll be presenting your case within 3-4 weeks.
I would give your guy the ultimatum right now. If your experience is anything like mine, it'll be faster for you to hire a replacement(who'll be paid upon completion) to finish the site from scratch, than it'll take your current guy to finish.
You might be able to get a debt collection agency involved. I don't think debt collectors charge a lot in up front fees, and they probably work fast.
It sounds like you are really thinking about just forgetting about it. That might be a good idea, getting your app or money may not be worth the money.
But before you do, check to see if there are any fast and efficient things you can do to collect. Small claims court might work out. Would a lawyer be willing to take your case for a large percentage of the money, and no payment upfront? It might not work, but it will at least give you a chance to get your app without putting in a significant amount of time.
I found an ebook with tips for collecting business debts, so the ebook will probably have a lot of information you can use. http://www.viacorp.com/DebtBook.html
Edit: I just realized looking through the book that you can petition a court, this might include small claims court, to send the case to arbitration. Arbitration has a lot of downsides for the consumer. The results heavily favor the plaintiff, and the defendant usually pays the fees if found guilty. But all of that is good here.
Sounds like you have a similar problem, at least Im not the only one.
I waived any late fees ( I didn't even mention them) and offered him bonuses if he finished within a certain date (he didnt but hes still demanding them).
Its amazing how angry he gets when I ask in the politest way possible that he show me some progress, even when he's 6 months late!