<human>: Legal Matter in Ontario, Canada

So as the title states, this guy I did some work for wants to sue me. What happened was, he needed some stairs built, so I built them. He was not happy with the work, so I offered to do the repairs for free, which is pretty standard for anyone. He denied, stated he wanted me to remove the work I had done and pay him $700, when he only had paid me $400. The additional $300 was for half the materials. I told him at best I could do was $400 and no materials as the materials were fine.

Since this project I have been looking for steady employment so that I'd be able to repay this guy his $400.00 that I was basically forced into agreeing to pay. I haven't been fortunate enough to find a job and he is now threatening to sue me.

I should mention I am about to be entering bankruptcy, due to a major financial setback and becoming severly depressed from other circumstances. What can I do here reddit? Can he sue me and they actually force me to pay him money I don't have? Can I just go bankrupt on him also?

Provide a brief overview of the text.
<bot>: Guy is threatening to sue me for $400 when I don't have a penny and am most likely going bankrupt. What do I do?