My advice would be to follow your gut. Your heart can lead you in all kinds of problems, yet your gut won't ever lie to you. Feel him out and listen to your gut, but always remain cautious.
Don't feel guilty. He is the one who caused the problem, and he feels terrible about it. That means he's human and vulnerable and regrets what he did, but he still did it, and you're wise not to trust him. Protect yourself first, and don't feel obliged to help him. I am in this exact same situation myself, except it's not a friend, it's a family member, so I know how hard it is!! Stay tough!