My in-laws are as devout Catholic as it gets and yes, this is what they believe as well.
I have never heard such a thing. I have been a practicing Roman Catholic all my life and I never heard that. It is sad. I was taught those free from sin are welcomed into Heaven.
Your inlaws are Feeneyites. It is true that among the sede-vacantists and extreme “Traditionalists” you will find this asserted. It’s one reason a lot of them reject Vatican II, saying Vatican II changed Catholic teaching from “all non-Catholics go to hell.”
But that’s false. Not even Unam Sanctam says that. When Fr. Feeney started teaching it in the 1940s, he was disciplined.
If you in-laws truly believe this, they are rejecting the express magisterial teaching of the Church.
But first you need to be sure you have not misunderstood their position. The Catholic teaching is that those who KNOWINGLY reject the Catholic faith are damned. But with all the confusion for centuries following the great schisms, most people don’t knowingly reject the Church but unknowingly reject it. If your inlaws truly believe that all non-Catholics go to hell, they are rejecting Catholic teaching but may be doing so out of invincible ignorance.
Or they may be knowingly doing so. You can’t know for sure, I can’t know for sure, only God knows for sure just who is culpable for holding false positions.
All I can do is state what the teaching is—as others have posted, from the Catechism of the Catholic Church, Dominus Iesus etc. If your inlaws look at the CCC and say, “I reject that because it’s tained by modernist doctrine,” then they MIGHT be knowingly rejecting Catholic teaching.
Or they might be doing so out of misinformation from their anti-Vatican-II circles. Only they can examine their conscience and decide which is the case.
But various people on this thread have cited abundantly the actual teaching of the Church. You can deny it, reject it, think you know better. And it may or may not be your fault. It all depends on what you in your heart of heart know—whether you have honestly sought to find out the truth about Catholicism or Mormonism or Marxism or Ayn Randianism or . . . . We are judged by God on whether we knew the truth and rejected it and whether we honestly tried to find the truth, whether not-knowing the truth was our fault or the fault of snake-oil salesmen we should have smoked out.