My issue is; I have my 16 yr old niece living in my home and exceeding very well in school, however her mother who is mentally unstable, topped off with abusive anger issues is threatening to rip her out of my home, do I have any legal rights? Or is filing for emancipation our next step? How can I protect my niece from her own mother?

First you need to explain how your niece came to live with you in the first place. If she just moved in, then you have no rights and you may actually be subject to arrest for kidnapping, interference etc.

What you should have done was apply for guardianship of the girl.

Please give us more info so we can help further.