Mely, I'm sorry you had a fight with your MIL. Sometimes I am so thankful not have the whole inlaw situation, although I believe I would have like my MIL, I'm not so sure about the FIL part.
Andrea- Oh my gosh that is so insane!!! If your agency bumps you when they didn't even tell you the proper way to do the paperwork I'd be contacting the higher ups. I hope they pull their heads out of their buttocks and get to helping you out!!!