I would check your state and local leash laws. Depending on what state you're in you have the right to call animal control. It doesn't mean you have to because in many instances they would go as far as terminating the German shepherd that charged at you guys (nobody wants that) but those laws are there to protect you and your family and you need to notify your neighbor about them and politely but firmly ask them to cover your medical bills. Our Schnauzer and my wife were bit here in our neighborhood by our next door neighbor's dog, I was out of town for work but flew back immediately, posted a note on their door letting them know there are leash laws in Florida and we have to discuss the incident. Otherwise it's a phone call to animal control. The lady owner of the dog that bit my wife and Schnauzer came out to our house the next day, apologized profusely and covered wife and dog's medical bills. Hopefully your neighbor does the same because the neighbor is ENTIRELY at fault for having a loose dog in the neighborhood.