Am I Able To Sue My Mother In Law For Stuffing Us On What She Agreed To Pay Us!

So my wife and I bought a house a couple years ago and her mother needed a place to stay so we agreed on $800 a month and that covers everything. Fast forward she hasn't paid us that amount in over 2 years giving us $200-500 and not chipping in on anything including the water bill. I got injured 2 years ago and it took 5 months to get workers comp and I depleted my savings keeping up with the mortgage and now my wife has become disabled and we're on 1 income and currently in forbearance as a result and her mother keeps giving the I can't afford it dance even though in the meantime she's bought 2 cars, a $3000 computer, got a dog that's completely ruined the room, runs her AC EVERY DAY even in the winter and she filed bankruptcy to discharge her overwhelming debt and still can't throw us any thing extra despite having making about $2800 a month.

I had to stop paying my credit cards also since I have to feed 3 children with zero assistance and I told we could eventually be in danger of losing the house and her only response was she can just live with her mother with no regards to our situation. By my calculations she owes us about $7800 in what she didn't pay in rent and about $650 on the water bill. Also her dog chewed up my wife's dentures and she held no responsibility and refused to replace them.

Our agreement was verbal but can we still sue her for she owes us? Thank you.