Is it permissible to sever ties of kinship with my paternal aunt, who is also my mother-in-law, given that she has caused religious and worldly problems and has attempted to harm me and my family?

Your paternal aunt is a close relative, and maintaining ties with her is obligatory. If she is as you described—prone to lying and backbiting—then you must advise her, caution her about God, and pray for her guidance. Maintaining ties with a disobedient person (fasiq) depends on thel benefit. If visiting her leads to harms, then it is better to avoid visiting and suffice with communicating by phone. You did well in preventing your husband from taking bribes, as bribery is forbidden and a grave sin. If the house is small and you are inconvenienced by your paternal aunt's son staying overnight, you have the right to refuse, and your aunt should not be angry about it. As for your daughter who attempted suicide due to mistreatment in her grandparents' home, this is a grave shortcoming on the part of her father, who is responsible for her. Suicide is a grave sin and a loss in this world and the hereafter.