To start a new para in the middle of someone's speech I believe you don't close the speech marks at the end of the previous para, but you do open new ones. So, ignoring the fact that these are very short and would probably not be separate paras, you'd do this:
"I was walking down the road and I saw him standing there, outside our house.
"He was dressed in black, and holding a large black bag." |
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As for whether it would work to have a whole chapter of someone's speech, my suggestion would be to make it like narrative. The character is telling the story but becomes the narrator for the chapter. You may have to play around with whether you use speech marks and interruptions from the listener, or not.
I am actually just about to write a chapter which is similar. In my case the father is telling his adult daughter something significant and involved. At the end of the previous chapter he begins to tell her, with her as vp character, and speech marks etc. Then I break chapters, and he becomes the narrator and viewpoint character for the whole chapter, with no speech marks or interruptions. At the start of the next chapter we revert to her vp, and speech marks for his speech. I haven't written it yet, but have thought about it and think it makes logical sense.
When he is the narrator for 'his' chapter, it probably won't represent the exact words he would use to tell his daughter, but the reader is told the story that he is also telling his daughter.
Best of luck,
Deb