Thought I would update the scenario now that some time has passed and the situation is resolved.
The situation was not accurately told me by the family in that it was actually her father that was at fault. He was drunk , as stated and hit the other vehicle while riding a motorcycle home late at night. The legal fees were actually to defend the family from the owner of the car he hit. In the end I was able to persuade the family to settle with the other person and pay for the damages to his car over a 4 month period. The money I gave was used as a "down payment" and the family accepted a payment schedule for the balance. I was not told the whole truth by my girlfriend as she was too embarrassed and felt great shame. She did not want me to "pay" for her fathers mistake , and given the fact that he lost his life...it was very hard for her. But in the end, everything worked out.
She has been living with me since late February, and I can say that while there have been several "communication" problems mostly related to her not telling me things , the relationship is great and it looks like I have found the one? Time will tell , but so far its working very well.
I will be going back to her family home next month for the Chinese "grave sweeping holiday" to visit her family again. We will be there for a week , and upon return is her birthday. Her mother will come back with us and stay for a week to see my home and visit Xiaolan. I hope everything goes well with her visit and she approves of my home .. of course compared to how she lives, this is the best her daughter could hope for in a home and relationship.
