This is not about the money for him - it's about power and control over you, which is what all abuse is really all about. Power and control over another. If it were me, I would prefer to go to court and contest the money owed back since you have a likelihood of winning that case. If you choose to pay him back over time, you are still tied to him in some way and are still forced to communicate with him for years to come. Though of course I understand your legitimate fears that he could attempt again to slander and harm you professionally. It's not an easy position to be in, that's for sure. I would definitely call the local domestic violence coalition for additional support and guidance. I have done that myself, and it has proven to be most helpful. I would listen to what your lawyer suggests: a cease and desist letter may just do the trick.
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"Twenty-five years and my life is still trying to get up that great big hill of hope for a destination"
~4 Non Blondes
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