Legal Question in Consumer Law in Kentucky

That would surely be a breach of contract. When you send in that payment, include a cover letter, make a copy of the check, and send it by certified mail or some other verified method (UPS, etc.) That way when he refuses the payment, you have evidence you sent it. Document everything. In that cover letter say "Pursuant to our conversation on x date, you advised you would refuse to accept my car payment as retaliation for me leaving your employment, and attempt to repossess the vehicle and ruin my credit. However, as we have a contract, I am enclosing my payment of x amount, check no. x, in accordance with that agreement. Failure to accept this payment will subject you to legal liability if any action is taken against me to reposses the vehicle or make a bad faith report to a credit bureau.". Likely he was just blowing smoke, but you don't want to take the chance.

Sounds like you were smart to find another job. Good luck with your new employment.