Aura of Pain and challenges

Hi everyone, A rules question for you. A friend and I are prepping for a game of Chaos vs Brets and were discussing some rules. We came upon aura of pain which my champion in chariot has, and whether it could be triggered before a challenge is issued (thus hitting the unit) or only after (thus hitting only the enemy character).

Rules for aura of pain: Once per game, when this character's combat is chosen during Step 1.1 of the Choose & Fight Combat sub-phase, ...

Rules for challenges: Challenges are issued when a combat is chosen during Step 1.1 of the Choose Combat & Fight sub-phase.

I'd say it's simultaneously and thus up to me (the chaos player) to decide whether to trigger it before or after. He obviously says it's after a challenge is issued and thus can only hit his challenging character.

What's your verdict?