Without the requested information, I can only provide you with general information, which hopefully will still be useful to you. First of all, I am sorry to hear about the issues you have experienced in your situation.
You cannot be forced to return and complete the job for the customer and all they can potentially do is accuse you of acting in breach of contract for failing to complete the works and pursuer you for compensation for any losses they have incurred as a result. At the same time, you can accuse them of acting in breach first, due to their behaviour so far and state that the contract had already been voided because of this and that your actions could not have amounted to a breach.
Whilst a party can make demands for payment, instruct debt collectors or threaten legal action, it is important to note that they can only really force someone to pay if they actually go to court, submit a claim and are successful with it.
There is, however, no guarantee that they will actually ever go that far. Many people issue threats and demands, without ever having the intention of taking the matter to Court. This is done in the hope that the scare the other party into complying with their demands to avoid the risk of being taken to Court. However, until a formal notification of a Court claim has been issued, there is never a guarantee that a claim will actually be made and it could always remain just a threat, rather than reality.
Even if a claim was made, I presume the compensation sought is below £10k, in which case this matter would be assigned to the Small Claims Court. This is a relatively low-risk option because it is specifically aimed at the smaller, legally unrepresented parties. The costs of claiming are not that high, there is no need to have a lawyer and incur further costs as a result and even if a party loses the claim, they will not be liable to pay the other side’s legal fees. All they would have to pay is the court fees, which at most will be several hundred pounds and whatever the Court has decided should be paid to the claimant as a result of their original claim.
Also, once judgment has been issued, on the assumption you lose, the judgment is entered on the Register of Judgments, Orders and Fines, where it will remain for 6 years. This is what is known as ‘having a CCJ’ and can impact your credit rating. However, if payment of the judgment is made within one month, the record will be removed from the Register and will no longer be visible. If payment is made after one month has passed, it will still remain on the Register for the 6 years, but will be marked as ‘satisfied’.
To conclude, it is possible to wait and see how far the other side is willing to take this before deciding on how to respond and even if a claim is made, it is possible to proceed and defend the claim in the knowledge that the financial risks of doing so will not be astronomically high and if any judgment made against you is paid within a month, there will be no further repercussions.