Narcisistic sisiter in law

I need to vent. Me and my sister in law don’t get along. We used to before but not anymore. She is very upset and unhappy in her life and takes it out on me. I feel so down over comments she made about me during an argument. Some of them are very hurtful. For example: she told me she will spit on me, she will call the cops on me, and that she will commit suicide and it is my fault that she will die. We live in the same house with my fil and her (and our kids). We are moving out now, because of the arguments. The whole argument started because I clean the house and cook. She feels like she can’t become the person who she wants to be because I do not allow her to do things aka clean. But the problem is she doesn’t clean. Never did beforehand. Her room and her area of the house (the whole second floor) is covered in laundry, garbage, and just junk. Husband and I live in the basement btw. My fil owns the house and he needs my husband to cosign to renew the mortgage. What do we do? We dont want to leave my 70 year old fil alone. My fil and sil do not get along either. (She doesnt get along with anyone actually). Anyways, I needed to write down my thoughts. And maybe someone can help me how to deal with a narcissistic person? There are so many things she said and done its hard to write down everything. Overall, she told me I am the reason she is miserable and I cause the problem. I don’t know how to not let negative and hurtful things bother me. I know I should let it slide and not let it bother me but I don’f know how. I have anxiety as it is and this makes my anxiety go out of control. Thanks for listening!