Seeking Guidance on Cutting Ties with a Toxic Family Member

As-salamu alaykum, brothers and sisters. I'm a 32-year-old husband facing a really tough situation with my father's wife. After my marriage, I had to completely cut ties with her again because of the harm she caused to both me and my wife (27). I don't even consider her my mother anymore because of how much pain she’s brought us. She emotionally pressured me to marry my wife after my divorce, which was partly caused by my mother but worsened by her arguing with my ex-wife’s family instead of trying to fix things. After about nine months of talking to my wife’s parents, I got to know her better and we got married. Unfortunately, this woman caused trouble during our wedding in Bangladesh. Our reception was canceled, she told my wife hurtful things just days before our nikah, and the wedding night was ruined because of conflicts between both families, including problems with food and timing. I couldn’t even get a proper photo with my wife on our wedding night. It was heartbreaking, and I still feel the pain from it. She controlled everything and acted like a victim when things didn’t go her way, even about gifts. She didn’t even give a simple wedding gift, and she insulted my wife multiple times. At one point, she told my wife’s family that my wife would get divorced, which caused my wife to be hospitalized. The first time I cut ties with her was over an argument about living arrangements involving my grandmother's apartment, which was unhealthy due to pollution and garbage nearby. She valued a small amount of money over our health and happiness. I stopped talking to her for five months then forgave her, but it only lasted a month. She continued causing problems, including disrespectful and hurtful accusations against my wife. I have no plans to speak to her again. She’s been the main cause of my mental health struggles and has also deeply affected my wife. I’ve been away from family support for most of the last 2.5 years, and her negativity has weighed heavily on us. My wife even suffered severe depression and self-harm during this time. We went for Umrah together once, hoping for healing, but she made inappropriate and judgmental comments about other women, which shocked my wife deeply. I’m asking for advice: If staying in contact with her only harms me and my wife, is it permissible in Islam to cut off ties with such a toxic person permanently? I pray to Allah for ease and for her guidance, but I feel lost and hurt. Jazakum Allahu khair for your support and prayers. Ameen.