Is it legal for a moving company to auction your belongings?

A friend of mine is having some trouble. When he moved he was given an estimate on the move. Now that the move has been made, the company has raised the price by nearly double the estimate. This causes more problems in the fact that half of my friends military paperwork, including medical files, were within the things moved. Now he cannot afford to pay the movers, and the owner of the company is threatening to auction his things. Is this truly legal? And serious advice. This is a big thing, so trolls, just move on.