Personally I would not accept the second offer if you do not feel 100% comfortable doing this. Especially since the person already has a red light as non paying bidder. And you already have another offer .
The person will probably pay by Pay Pal goods and services, so each transaction will cost you a fee , I'm not sure but I think there is also a fixed fee of 1 or 2$ so taking time payments is losing you money.
And there is always the risk she will back out and I don't know if Pay Pal is honoring your "payments are non refundable" . In the end she can prove she sent you some money and did not get a model. Let alone the hassle of possible having to chase after each payment.
You would have to keep each payment somewhere until the model is finally paid and accepted by the buyer. You have the risk of something happen to the model during the time you wait for all the payments , so in worst case you have to refund the buyer.
The buyer can try to borrow money elsewhere (because in the end time payments is not much different) or change priorities and pay you in full.
Granted I'm grateful that people did let me pay in time payments in the past , but personally I would only offer it under certain conditions. The buyer needs to have a stellar reputation or someone I personally know, payments would be direct bank transfer and the offer is much better than any full payment offer or the only offer.

Ulla Harneit