Wa `alaykum As-Salamu wa Rahmatullahi wa Barakatuh

 

It looks like there are issues in the relationship that made them demand such things and then even move into Khul`.

 

My advice is to see a local Imam that they are comfortable with and trust and talk to him about reconciliation, now even if it means to make them feel safe by giving them some of their demands (if you wish that) and see if that works.

 

If they refuse and insist on Khul`, you have to be ready to face your choices even if they are of hardship and unfair sometimes.

 

Almighty Allah knows best.