Along the lines of a couple of the previous posts, I have always lived by this:
If a "friend" is worth losing over money, then they are a "friend" worth losing...
Look at it this way, it only cost you a couple/few hundred bucks and you will never have to see this guy again, in fact, he will avoid you at all costs. He will be the one that is uncomfortable, and have to constantly think about it. If there are mutual situations where you both might be there, a birthday part, a BBQ, etc. he will be the one sweating it and worrying the whole time...
I have been bitten before by "friends" I'm an old softy and people mistake my kindness for foolishness. Shame on them.
Move on and consider it a loss, or the gain of one less dead beet person in your life.