If I settle out of court, without a lawyer can they still sue me?

My dog bit a guy in my parents backyard, I was sent a letter from his lawyer stating that we can settle for $7,500 or they will take me to court. I can not afford this nor can I afford a lawyer. Due to the reason filed to my parents home owners insurance they will not pay out. I have fought with them for 2 weeks and they are not budging. I want to counter offer the $7,500 to a lower amount. I just want to make sure that if I pay out without a judge or a lawyer of my own involved that they can't come after me or my parents again. Any information will be greatly appreciated Thank you