Letters to the Editor
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stop rationalizing
Onolon, his neighbor owes him money, and is bullying the guy to get out of paying it. Your reply is rationalizing this ex-con's behavior, behavior which is unacceptable in every sense of the word.
Auto-mechanic: The ex-con already has you pegged as a sucker, so talking to him any more won't solve a thing. Kiss the money goodbye; your life is worth more than $800. People like this will kill you for $20, or even just for kicks if they think they can get away with it.
You have two choices--stay in the neighborhood, and get the cops involved to pry the guy out of there, or take an extra job and get the money to move the heck out.
Calling the cops when your neighbor is being anti-social does work (I speak with some experience here. When I was a student, I lived next door to a family of 10 living in house designed for 4 people who thought partying every night until 2 am was fun). It can take a while (it took me 8 months), you'll have to document his behavior and get your other neighbors' help, but he'll leave when the cops lean on him. He'll probably have to leave for a technical reason, like violating his parole; my neighbors had to leave because they were violating zoning laws that regulated number of occupants.
Further, NEVER give away work for free or for a drastically reduced rate. It can be the best work in the world, but people won't value it, and they won't value you. Open your own garage, or work for a good firm, and earn the money you deserve so you and your fiancee don't have to live in a neighborhood with scum.
And, have a Merry Christmas. Save Cary's "good will towards other humans" stance for your fiancee and your family.
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See it from his point of view
Consider this a good lesson on how to do business as a mechanic. The first time you worked on his car without incident. But you assessed the damage and quoted him the fee ahead of time and he could agree to it. The second time you only have a price for him at the end 'which after five days added up'. That is a recipe for bad blood between you and your customers. I don't think this is just about him being an ex-con, as you two got along and did repairs before with no problems. He is pissed about the way it panned out this time and doesn't trust you.
Even if you did an honest job for him, think how this situation looks from his end. All us regular people ever hear from mechanics is how they're giving us a half off deal and everyone else will charge us sooo much more. More work on the car adds up and you've already got his car so he can't really do or say anything about it.
Cary's advice is worth considering in principle, since you're smoothing things over by giving him the chance to actually negotiate and agree to what he thinks a fair deal would have been, the way business should properly be done. But since the guy's threatened you the day for that is long over. I'd go with a more passive route of cutting all communication with him. If he ever needs work done on his car again, tough. Don't pick up the phone when he calls. Don't answer the door if he knocks. Take to wearing your ipod every time you go outside so if he happens to be out there and tries talking to you you can just pretend not to hear him or notice him.
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Reconsider small claims court.
First, gather all the evidence. Sales receipts for the car parts, detailed description of work performed, etc. Get an estimate from two garages for similar work. Next, your word against his? You are, I assume, an average guy and he's an ex-con. I think you've got the credibility.
If you don't go to small claims court, you can send him an invoice in the mail. Make it look official. Tack on a comment about interest being due if payment isn't made on time. Call him up a week or two later and say your accountant is pressing you to sell the bill to a bill collector, but you want to do right by your neighbor. Quote Cary's spiel about brotherly love and the holiday season and waive the interest and promise not to send the bill collectors if he pays up promptly. I wouldn't give high odds for this technique working, but you have nothing to lose.
Next, if you're going to run a successful business, you need to learn better business practices. Make them automatic, as even if you end up with a better clientele than an ex-con, if you are dealing with someone with cash flow problems (and this can be an upstanding businessman who looks wealthy), they put off paying their bills as long as possible. Most small business owners have been burned -- and generally not by people they know are ex-cons. Go to your library and find a book about running a small business. A good book will tell you a lot more than I can do in a few paragraphs.
I'd take the guy's threats seriously, unless you really know that he never follows up. If you go to his house again (after a phone call) make sure you take back up.
Good luck
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Some lessons are more costly than others
Oh, gee, honey...
You aren't *ever* going to see your money (and I suspect you know that).
Don't approach this man again: you have gotten all the good you are going to from him, and only bad remains. Should you suspect his child (or him) of damaging your property in the future, then go through proper channels. Call the police. You have once done him the favor of trying to mend things between you; that is sufficient.
Is your current housing really worth what it seems to be costing you in stress and seemingly well-founded fear?
Start looking for a rundown bungalow in a different neighborhood. Not all of them come with a local psychopath (because that is what someone who harms animals is).