Is hiring a lawyer reqd. while filing chargesheet by IO u/s 279

Sir, my car hit another car and thanks to God that no one got hurt at all, just minor damage to the car. The driver of the other car asked me to pay completely unreasonable amount of damage at the scene. Upon not agreeing to it, he filed an FIR against me and a case under only Section 279 was registered against me. I got a lawyer and got the car released but the original papers of my car remains with the IO. Now the IO is ready to file chargesheet. I haven't compensated the party for the damages to his car, there has been no contact with him since. The IO suggests me to plead guilty, pay the fine and close the case without paying any damages to the party since he is again asking for an insanely unreasonable amount. I really can't afford a lawyer if the amount he charged me the first time is the amount he will charge me this time again. Is hiring a lawyer this time again required or could I plead guilty on my own? Does the damaged party have any right to come after me after I have paid the fine to the courts? Please help.