Dog Gone It!

So last Sunday, our dog Gir jumped off the porch over the fence and started fighting with our neighbor's dog. She was out walking with her dog when this happened. She got bit on the forearm in the process of trying to brake up the fight. She ended up having to go to the hospital and get a couple stitches in her arm. She wasn't very happy, which I understand. We've tried to talk to them since then and it feels like we might be being ignored. I feel terrible about it.
The deputy finally came and talked to us that night. She asked about Gir's breed, if he was fixed, if he has ever shown any aggression, etc. Our neighbor I guess said he has always been aggressive and she wanted him put down. So for most of this week I've been filled with such guilt and shame. It has been hard to even look at Gir since I was under the impression he would have to be put down. Terrible feeling.
We have to keep him quarantine for this next week just to make sure he doesn't have rabies or anything. After that, we need to take him to the vet and have his rabies vaccine updated. But we don't have to put him down(a court order in required). I feel so relieved.

Gir is a 3 year old Border Collie/Australian Shepherd mix, is neutered and has always been... timid. He has always been timid. He is good with kids. He plays with our cats and all of our families' dogs with no problem. The only dog he has never gotten along with was our neighbor's dog. I am not sure why he doesn't like that dog. Maybe it's because it is a territorial dispute between them.
Apparently there is a leash law here. Funny because most of the people's dogs around here wander around. Last summer we were in our driveway minding our own business and two collies came up and attacked Gir we yelled at them and they took off. Still don't know whose dogs they are. those same dogs came out of nowhere one day when I was walking over to one of my neighbors houses. From behind me I heard some movement and saw the dog charging me and growling. That was scary. I started yelling at it and moving my arms (some reason the thought of acting bigger and louder came to mind). If we want to talk about dog aggression those two dogs would be poster pups.
Gir is not. Never has been. So I am not entirely sure what we are going to do. I think we are going to probably keep Gir. The awkwardness with our neighbors is what I'm not sure how to fix. I'm glad this is Conference weekend so we can avoid them(yes, avoiding is how I fix things). We can't move until the summer anyway so I guess I just need to do what Roy does. Worry when it gets here. :)