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First off welcome to the forum!
A few questions:
1 - what is the breed mix in general. (poodle mix, Collie mix etc.)
2 - How old is your brother? and how badly did he squirt the dog? Is it possible that he traumatized the dog? (you were there, so u need to be the best judge).
Does he often play with the dog in a rough way?
3 - before this incident, did the dog freely roam the house with no anxiety?
4 - You wrote "Bella has never had any medical or mental problem and since this is new for me I am sincerely really for her (will she stay like this? is she scared of us?)." When was the last time this dog saw a vet?
Others may have immediate advice for you, but i think these questions might prove useful in their replies as well.
Good luck!
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