Ensuring safety in autonomous vehicles necessitates advanced path planning and obstacle avoidance capabilities, particularly in dynamic environments. This paper introduces a bi-level control framework that efficiently augments road boundaries by incorporating time-dependent grid projections of obstacle movements, thus enabling precise and adaptive path planning. The main control loop utilizes Nonlinear Model Predictive Control (NMPC) for real-time path optimization, wherein homotopy-based constraint relaxation is employed to improve the solvability of the optimal control problem (OCP). Furthermore, an independent backup loop runs concurrently to provide safe fallback trajectories when an optimal trajectory cannot be computed by the main loop within a critical time frame, thus enhancing safety and real-time performance. Our evaluation showcases the benefits of the proposed methods in various driving scenarios, highlighting the real-time applicability and robustness of our approach. Overall, the framework represents a significant step towards safer and more reliable autonomous driving in complex and dynamic environments.